Do large businesses have too many banking relationships?
A new report out of fintech provider Adyen and Boston Consulting Group seems to suggest so. In a survey of 300 CFOs, treasurers and other finance leaders, researchers found that, on average, enterprise businesses bank with five to six financial institutions. They also manage more than 40 separate accounts, according to the report.
“The report’s core finding is clear: The growing number of banking and payment relationships an enterprise is forced to manage is directly hindering cash visibility, creating unnecessary burden on financial teams and ultimately muting returns on working capital,” Adyen and BCG said in a Tuesday press release.
Among the 62 CFO set of survey takers, respondents said that on average, they spend about 23% of their time managing pay-ins and payouts, while another 10% is dedicated to “managing partners and bank relationships,” the survey said. CFOs said they spent about 17% of their time on “liquidity management.”
That largely mirrored responses from the 255 treasurer respondents, who, on average, said they spent about 20% of their time handling pay-ins and payouts, and about 13% managing banking relationships.
At the same time, much like their CFO counterparts, corporate treasurers are seeing their remits expand beyond day-to-day money management. In an increasingly digital economy, for instance, cyber risks have emerged as a new area of concern for this set. Among treasurers surveyed, just about half (47%) identified cyber threats and fraud risks among the “top three greatest risks” they’re facing. Operational control (47%) and economic risks (33%) also ranked near the top of that list.
“Treasurers are moving beyond optimizing liquidity in isolation,” said Adyen CFO Ethan Tandowsky in the report. “They’re optimizing the entire receivable-to-payable flow with customer experience at the center. This shift will shape the next generation of finance.”
Meanwhile, almost half (48%) of the CFO respondents cited “liquidity transparency and optimization” as the most relevant challenge in corporate treasury, while 18% cited efficiency and speed of payments.
Across all respondents, 74% said they would “like to leverage more integrated money management solutions covering the entire cash lifecycle,” while 88% said they’re likely to consolidate services to “fewer providers than they currently use.”
“Corporate treasury is at an inflection point,” said Stanislas Nowicki, managing director and partner with BCG, in the report. “Trusted providers, modern technology, adequate payment rails, and the finance function’s appetite to unify and improve are all there. It’s time for CFOs to demand more from their treasury function and from the partners who power it.”
