1

CGI
Transaction Banking Survey 2017
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Table of Contents
Foreword 3
Client Experience and Satisfaction 5
Client Overall Satisfaction 6
Reviewing Banking Relationships 8
Bank Products Under Review 9
Changes in Banking Relationships 11
Client Overall Satisfaction with Specific Services 12
Bank Selection 13
Corporate Practitioner Perspective 14
Bank Activity 15
Number of Banking Partners 16
Banking Channels 19
Preferred Bank Access 23
Types of Access to Bank Services 25
Areas for Improvement 24
Challenges 29
Challenges Faced when Integrating with a Bank for Cash Management Services 30
Service providers 32
Challengers for Banks 33
Barriers to Growth 34
Reviewing Relationships 36
Drivers for Change 37
Rating Performance 40
Scope of Service 41
Future Growth Strategy 43
Models 44
Business strategy 46
Mobile App Services 48
Competitive Differentiation 49
Value Added Services 51
Other partnerships 54
Transaction services 55
Security 56
PSD: The Revised Directive on Payment Services 58
About the Survey 60
Conclusion 62

Foreword
For the fifth year running,
CGI is a proud sponsor of
the GTNews Transaction
Banking survey, which
offers critical insight into
the corporate-to-bank
relationship. While 2016
survey results showed a
dramatic drop in corporate
satisfaction, this year the
decline is bottoming out.
Corporate satisfaction
remains low, but there is a growing sense of opportunity and
greater clarity for corporate and transaction banks in finding
the pathway to increased corporate satisfaction and loyalty.
Corporate satisfaction remains constant, with 54% very satisfied
and satisfied with their current banking relationships for the
second year running. However, there has been an 83% year-
over-year drop in the use of non-banks from last year, and bank
relationships appear to be contracting, compared to the increase
in multi-banking we have seen over the last few years. Banks
also seem to be more optimistic and responsive to the needs of
corporates, with 43% now stating they are operating a global
banking model, compared to 31% a year ago. This corporate
preference to remain with traditional banks and the stabilization
of multi-banking expansion sends a clear optimistic message to
banks—but less so for non-banks.
However, while corporates may be turning from non-bank
competitors, half of corporates are actively reviewing their bank
relationships, especially small to medium enterprises (SMEs) and
large multi-nationals for cost, technology, security and service
reasons. Corporates are seeking to drive down their cost of
banking and consolidate relationships. They are seeking greater
integration of services and improved real-time capabilities.
Their banks’ security and reputational capabilities also are under
scrutiny, and they continue to seek better digital servicing.
In terms of the cost of banking, leading banks are investing in
efficiency initiatives, especially in vanilla services, to drive down
costs and pass on the savings to their customers to address
higher price competition in the market. Cost reasons are driving
66% of corporates to review their bank relationships.
When comparing key bank relationship factors with bank
performance ratings, we begin to see some clear messages
about the pathway to improved corporate satisfaction and
loyalty. In terms of security, technology and service factors, provision of trade finance in a multi-service online environment
3
one in three corporates do not consider their banks to be
performing excellently or very well. Current provision of
technology services shows the biggest disappointment among
corporates. Of greater concern, based on this year’s results, is the
mismatch between what corporates and banks view as priorities.
Consequently, this year’s survey provides valuable insight for
banks who want to reprioritize to increase corporate satisfaction.
Corporates place a bank’s security record and financial crime
capabilities at the top of their list for both existing and new
bank relationships. Given well known security breaches and
fines, as well as the move to open banking and new regulations,
89% of corporates rate bank security capabilities and track
records as the most critical factor in their existing bank
relationships; yet only 43% of banks view security as a source
of differentiation. Both corporates and banks view security
as a mutual responsibility, and corporates are looking for a
much more proactive security approach from banks to protect
the system as a whole. As we move to real-time payments,
corporates believe the role of banks in ensuring end-to-end
security is significantly increasing, so this is a key time to
discuss security with corporates.
The priority mismatch continues when we look at technology
factors important to corporates in their bank relationships and
the banks’ perspective. Over the last two years, corporates have
placed great value on the harmonization of standards among
banks. This year is no different. Over 50% of corporates report
major challenges in onboarding, file formatting and process
integration with new banks. While 62% of banks recognize
ease of integration as a source of competitive differentiation,
only 29% view conformance with industry standards as such.
Forty-four percent of banks view the streamlining of onboarding
and entitlement services as a priority investment to drive new
revenue. While banks may view industry-wide standardization as
enabling greater switching, the voice of corporates is clear, and
the time to act is now.
Integrated digital servicing continues to fall short of corporate
expectations. Many banks are making a serious investment
in new portals, and 50% of corporates report that they are
offered multi-services portals. Another 37% percent benefit
from portals that deliver services across multiple banks. Online
service use and preference are not following. If we look at the
provision of multi-services online, we see that many individual
services are not currently integrated into this environment.
In which case the treasurer’s desire for integrated working
capital management, for example, cannot be met. Likewise, the
Foreward
is very low at 28%. How can the treasurer conduct integrated
supply chain finance in this instance? Driving a client-centric
approach to portals, with the inclusion of related services, is
now critical.
Bank product satisfaction this year is poor, especially in terms
of SMEs, with only 25% considering product services as
excellent or very good. Satisfaction with real-time payments
is below 40% across all geographies - a clear warning sign
to banks that value-add services are needed over and above
transactional vanilla services. Corporates that have turned away
from non-banks are now looking for alternative lending and
supply chain platforms from their banks. Multi-nationals and
SMEs, in particular, are looking for enhanced working capital
management services. Banks appear to be responding, apart
from offering new lending options.
Corporates also are looking for other value add - services - an
area where banks can generate new revenue streams. The
highest rated value-add service from corporates is bank support
in understanding upcoming regulations and changes. This service satisfaction and loyalty.
also saw the biggest delta; while 62 percent of corporates rated
this as a priority value-add service, only 39 percent of banks
were aligned.
Interestingly, the second largest discrepancy between corporate
and bank priorities was security advisory services. Thirty-
three percent of corporates view these as a priority area for
innovation, while only 16% of banks agree. There is clearly an
opportunity to add more value-add services and to benefit from
the revenue streams associated with them. Bank value-add
service innovation must be high on the agenda.
The good news is that banks are aligned with their customers
when it comes to the importance of innovation. Corporates are
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demonstrating a real interest in receiving support in leveraging
new technologies such as blockchain. Blockchain is the second
top rated value-add service among corporates and the highest
rated innovation area among banks in terms of its potential
for generating new revenue. Moreover, banks are beginning to
support their customers in this area, as the percentage of banks
offering open APIs more than doubled from 15% to 32%.
Over the past five years, the results of this critical market survey
of corporate-to-bank relationships has provided important
insight on how the market is changing, actions that banks
should take in response, and the mounting frustration from
corporates when it comes to the delayed change in the banking
system that serves them. In this year’s results, we see much
more clearly that corporate expectations are maturing. Over
the next three years, corporate and transaction banks will,
on average, increase new technology investment by 24% to
transform their business to become customer centric. Now is
the time to ensure that this investment in a fully technology-
enabled business covers the areas essential for driving corporate
CGI is a world leader in consulting, systems integration,
outsourcing and software to wholesale banks around the world.
We hope you find this report of value in helping you to prioritize
initiatives that promote success. If you would like to discuss
this research and how we can support you, please contact us at
banking.solutions@cgi.com
Jerry Norton
Senior Vice President, Global Financial Services
CGI
 5

Client Experience
and Satisfaction
Client Experience and Satisfaction 6

Client Overall Satisfaction

In today’s increasingly challenging regulatory environment, and with a plethora of new digital products entering the market, it is crucial
for corporate treasurers to maintain a strong relationship with their banking partners. This challenging climate equally means that
treasurers need to demand more from those banking partners, namely more advanced solutions alongside the traditional services they
receive from their banks.

Although we saw a large fall in corporates’ satisfaction with their main banking from 2015 to 2016, and there has been no regaining of
ground in this area, it does appear that the increase in disapproval has been arrested.

Overall Satisfaction with Service Provided by Main Banking Partners

(Percentage Distribution of Corporate Practitioners Rating Service ‘4’ or ‘5’ on a 5-point scale)

Highly satisfied
(service rated '4' or '5')
46% 54%
Less than highly satisfied
(service rated '1', '2' or '3')

Overall, satisfaction for the service provided by main banking partners among corporate practitioners is almost the same as last year,
with just over half (54%) of corporate practitioners rating the service they receive ‘4’ or ‘5’ on a 5-point scale (where ‘1’ was not at
all satisfied and ‘5’ was very satisfied). Last year the figure was 55%. Although this marks another decrease in overall satisfaction with
banking partners’ service, this decrease is far smaller than what was recorded between 2015 and 2016, when overall satisfaction fell 13
percentage points from 68% to 55%.
Client Experience and Satisfaction 7

Overall Satisfaction with Service Provided by Main Banking Partners

(Percentage Distribution of Corporate Practitioners Rating Service)

On a scale of 1 to 5, how satisfied are you with the service your organization receives from its main banking partners?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

5 (very satisfied) 7% 7% 4% 17% 4% 8% 10% 8% 9%

4 48% 37% 63% 44% 50% 47% 50% 48% 45%

3 39% 43% 33% 39% 33% 37% 36% 40% 40%

2 3% 7% 0% 0% 4% 3% 0% 2% 2%

1 (not at all satisfied) 4% 7% 0% 0% 8% 5% 4% 2% 4%

Corporates with annual revenues of more than $5bn are more than twice as likely as both smaller and mid-sized firms to rate their
satisfaction with banking partners’ services as a ‘5’. Where 17% of these larger businesses rated their satisfaction with banking
partners as a ‘5’, just 7% of smaller corporates (those with annual revenues of less than $500m a year) and 4% of mid-sized corporate
treasurers (those with an income of between $500m and $4.9bn a year) did so.

Mid-earning companies are the least likely group by earnings to rate the service they receive as very satisfactory, this is the lowest of
any demographic surveyed alongside publicly held companies.

Public organisations and medium income companies are also more likely to rate their satisfaction the lowest of all, with 8% and 7%
respectively rating their banking partners’ service a ‘1’.
Client Experience and Satisfaction 8

Reviewing Banking Relationships

Review of Strategic Relationship with Main Banking Partner

(Percentage of Corporate Practitioners)

Yes

50% 50%

No

Overall, in 2017 exactly half of corporates are reviewing their organization’s strategy with their main banking partners, and half are not.
Far more corporates are choosing not to review their strategy this year, marking a 12-point increase on 2016’s figure.

Review of Strategic Relationship with Main Banking Partner

(Percentage Distribution of Corporate Practitioners)

Are you reviewing your organization’s strategy with your main banking partners?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Yes 50% 53% 44% 72% 58% 50% 54% 60% 53%

No 50% 47% 56% 28% 42% 50% 46% 40% 47%

Overwhelmingly so, higher income organizations (those with annual income of more than $5bn a year) are most likely to be reviewing
their strategic relationship with their main banking partner – nearly three-fourths (72%). As larger organizations are, as we found in
the previous section, generally more satisfied with the service they receive from their banking partners, it could be inferred that regular
strategic review with main banking partners leads to greater satisfaction with the service they provide.

Businesses based in North America and publicly held organizations are also more likely than the average to be reviewing their strategic
relationship with their main banking partners, with 60% and 58% of these respondents selecting ‘yes’ respectively.
Client Experience and Satisfaction 9

Bank Products Under Review

Bank Product Areas Under Review

(Percentage of Corporate Practitioners Planning to Assess Current Relationships with their Main Banking Partners)

Cash Management Services 70%

Payments 65%

Liquidity solutions (including pooling / netting) 48%

FX (including hedging) 45%

Reporting 33%

Trade finance (letters of credit, collections) 30%

Receivables 29%

Payables 28%

Investment banking / capital markets 24%

Credit / lending 20%

Open account (supply chain financing) 19%

Depository services 18%

Forecasting 18%

Other 3%

0% 10% 20% 30% 40% 50% 60% 70% 80%

As was the case last year, cash management services is the bank product area most likely to be under review, with 70% of corporates
highlighting this. However, this is a ten-point reduction on last year’s figures. Nearly two-thirds (65%) of respondents selected
payments, a new option for this year’s survey, as the bank product area second most likely to be under review.

The remaining options track reasonably closely with their positions last year, with the exception of payables. The number of corporates
selecting this fell a third, from 42% in 2016 to 28% this year.

In addition, the proportion of corporates selecting credit/lending for review almost halved, from 39% last year to 20% this year. And in
another dramatic finding, Investment banking/capital markets climbed from the least cited bank product last year, selected by 17%
of corporates, to 24% this year.
Client Experience and Satisfaction 10

Bank Product Areas Under Review

(Percentage of Corporate Practitioners Planning to Assess Current Relationships with their Main Banking Partners)

What bank product areas are you reviewing?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Payments 65% 60% 63% 67% 46% 68% 66% 60% 68%

Trade finance
30% 27% 26% 44% 29% 32% 38% 33% 30%
(letter of credit, collections

Open account 19% 13% 19% 28% 13% 21% 22% 21% 19%

Cash Management Services 70% 57% 78% 89% 71% 68% 68% 81% 77%

Reporting 33% 33% 44% 33% 38% 40% 36% 40% 36%

Payables 28% 23% 33% 28% 25% 29% 36% 35% 28%

Receivables 29% 23% 41% 28% 21% 32% 38% 35% 28%

Liquidity Solutions
48% 50% 33% 72% 50% 47% 52% 54% 53%
(including pooling/netting)

Depositry services 18% 17% 26% 17% 13% 24% 20% 17% 21%

Investment banking / capital

24% 20% 22% 33% 13% 26% 16% 25% 13%
markets

Credit / lending 20% 20% 22% 28% 13% 29% 24% 21% 23%

FX (including hedging) 45% 37% 52% 78% 50% 45% 58% 54% 57%

Forecasting 18% 13% 26% 22% 4% 24% 18% 27% 19%

Other (please specify) 3% 3% 4% 0% 0% 5% 0% 2% 2%

None of the above 10% 13% 7% 0% 13% 11% 8% 4% 4%

Nearly all larger companies (those with an annual income in excess of $5bn) are reviewing their cash management services, with
89% of respondents citing this. On the other side of the spectrum, 57% of smaller businesses (those making less than $500m a year)
are reviewing this bank product.

Larger organizations are also more likely to be reviewing their liquidity solutions, FX and investment banking/capital markets than
other organizations.
Client Experience and Satisfaction 11

Changes in Banking Relationships

Overall, corporates are more likely to have increased the number of banking relationships they have over the previous 12 months
to June 2017 than they were in the same period to June 2016. There was a ten-percentage point increase here. The percentage of
corporates that decreased the number of their banking relationships fell modestly compared with last year, from 19% to 15%. In total,
half of all corporate treasurers surveyed saw no change to the number of banking relationships they had over the last year.

Changes in Bank Relationships in the Past 12 Months

(Percentage Distribution of Corporate Practitioners)

How has the number of bank relationships in your organization changed

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Increased 35% 33% 37% 33% 25% 32% 38% 44% 34%

Decreased 15% 7% 22% 22% 25% 11% 18% 17% 19%

Unchanged 50% 60% 41% 44% 50% 58% 44% 40% 47%

Private businesses are more likely to have increased the number of banking relationships they have than their public counterparts.
Across income bands, smaller companies (those with an annual income of less than $500m) are the least likely to have decreased their
number of banking relationships, with just 7% saying this is the case compared to 22% of both mid-sized and larger organizations.

Larger corporates (those with annual incomes of more than $5bn), as well as corporates whose treasuries operate in North America and
Western Europe, are far more likely to have increased their number of banking relationships over the last 12 months than they were
over the same period last year. Where 14% of larger corporates increased the number of banking relationships they had in the
12 months from June 2015-16, more than twice the proportion did in the 12 months from June 2016-17, at 33%.

In North America, the proportion of organizations that had increased the number of banking relationships they have over the last
12 months more than doubled from 21% to 44%, and in Western Europe the percentage rose from 21% to 34%.
Client Experience and Satisfaction 12

Client Overall Satisfaction with

Specific Services
Overall, the level of satisfaction with banking partners for a range of different services has not changed significantly from last year. The
chart below illustrates the proportion of financial professionals that rated their partners ‘excellent’ or ‘good’ in each area.

Overall Satisfaction Provided by Main Banking Partners for Each Service

(Percentage of Corporate Practitioners Rating Service as “excellent” or “good”)

Payments 52%

Cash Management Services 49%

Liquidity services (including pooling / netting) 49%

Credit / lending 48%

FX (including hedging) 43%

Trade finance (letters of credit, collections) 41%

Reporting 41%

Payables 40%

Real-time payments 38%

Receivables 38%

Investment banking / capital markets capabilities 33%

Depository services 32%

Open account services (supply chain financing) 29%

Forecasting 25%

0% 10% 20% 30% 40% 50% 60%

When it came to rating their satisfaction with specific services, most corporates (52%) rated payments either ‘excellent’ or ‘good’.
Close behind was cash management services and liquidity services, each with 49% of corporates rating them ‘excellent’ or ‘good’.
Corporate practitioners were least satisfied with forecasting services of the 14 options presented, as just a quarter rated this ‘excellent’
or ‘good’.
 13

Bank Selection
Bank Selection 14

Corporate Practitioner Perspective

The chart below illustrates the proportion of corporates that rated the level of value for each factor ‘very important’ or ‘quite important’.

The picture here looks a little different from last year. In 2016 security was the factor considered most important to corporate
practitioners when establishing a new banking relationship (87%), this year that option’s counterpart security and financial crime
policies and capabilities was the third most considered factor, with 81% selecting it, representing a fall of six percentage points.

Factors Considered When Organizations Establish a Banking Relationship

(Percentage of Organizations Rating the Level of Value ‘very important’ or ‘quite important’)

Selecting the best-in-class providers 89%

of products or services 88%
Highly efficient, real-time and integrated 87%
technology systems and processes 82%
Security and financial crime 81%
policies and capabilities 84%
Selecting a provider that offers strategic 75%
financial and market advice 80%
67%
Geographic footprint of the bank 61%
Credit facilities offered in addition 65%
to transaction services 77%
Historical relationship between the 57%
bank and the organization 61%
Selecting the lowest cost providers 52%
of products or services 42%
51%
Expected digital customer experience
75%
Allocating bank services in proportion 50%
to credit facilities 57%
28%
Access to third party non-bank services
38%
43%
Other 50%

0% 20% 40% 60% 80% 100%

Corporate Bank

The most selected factor this year was selecting the best-in-class providers of products or services, which was cited by 89%
of corporates. Highly efficient and integrated technology systems and processes was once again considered the second most
important factor to organizations establishing a banking relationship, with 87% of corporates selecting this.

Notably, the proportion of businesses considering selecting a provider that best supports the organization from a strategic
standpoint a ‘very important’ or ‘quite important’ factor when establishing a new banking relationship fell 10 percentage points, from
85% in 2016 to 75% this year.
 15

Bank Activity
Bank Activity 16

Number of Banking Partners

The number of banks a treasurer works with will depend on many factors, including availability of credit, geography, and the services
offered. Treasurers must additionally consider counterparty risk, which can be mitigated by diversifying bank account relationships, and
also security.

Although more corporate practitioners have increased the number of banks they work with on a regular basis, the number of banking partners
treasurers have today is largely the same as it was last year. More than one third (37%) of corporates have between six and 20 banking
relationships, exactly the same percentage as last year, while 34% are working with two to five banks, compared with 36% last year.

Number of Banks Organizations Work With on a Regular Basis

(Percentage Distribution of Corporate Practitioners)

8%
21%
1

2-5

13% 34%
6-10

11-20

21+
24%

Just one-fifth (21%) of respondents works with 21 or more banks. Half (50%) of the corporate practitioners with more than $5bn
annual income maintain 21 or more banking relationships.
Bank Activity 17

Number of Banks Organizations Work With on a Regular Basis

(Percentage Distribution of Corporate Practitioners)

How many banks does your organization work with on a regular basis?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

1 8% 20% 0% 0% 8% 13% 8% 4% 4%

2-5 34% 47% 33% 5% 17% 40% 20% 21% 26%

6-10 24% 17% 44% 28% 29% 29% 32% 40% 30%

11-20 13% 7% 7% 17% 13% 8% 12% 8% 13%

21+ 21% 10% 15% 50% 33% 11% 28% 27% 28%

Unsurprisingly, as was the case last year, larger corporates, or those that have a greater annual revenue, tend to have more banking
relationships. Privately held businesses also have more banking relationships than their publicly traded counterparts.
Bank Activity 18

Centralized Treasury Functions

For treasurers, the decision of whether to centralize or decentralize certain functions hinges on what model offers the most efficiency
for them. Some functions may benefit from highly specialized, local knowledge, allowing corporates to make quicker decisions as
conditions change. Functions such as these would benefit from decentralization.

However, centralized functions allow for economies of scale, ensuring effort is not duplicated across treasury operations. The price of
these gains in efficiency? Greater technological capabilities.

In 2016 the three most commonly centralized treasury functions among corporate practitioners were FX (77% of organizations were
centralizing this treasury function), risk management (74%) and cash pooling/netting (71%). This year FX fell into fourth position of
the 12 options available, with 70% of corporate practitioners centralizing the function.

Taking its place as the most commonly centralized treasury function was investment services, cited by 74% of organizations, up 12
points from last year.

Centralization and Decentralization of Treasury Functions

(Percentage of Corporate Practioners)

Investment services 74% 8% 18%

Cash pooling / netting 73% 11% 16%

Risk management 72% 19% 9%

FX 70% 14% 16%

Forecasting 66% 30% 4%

Regulatory reporting 61% 32% 7%

Accounts payable 52% 41% 8%

Credit services 49% 24% 28%

Payment reconciliation 45% 49% 7%

Accounts receivable 41% 49% 10%

Trade finance 40% 22% 38%

Supply chain finance 29% 20% 51%

0% 20% 40% 60% 80% 100%

Centralized Decentralized / regionalized Not applicable / Do not use

The treasury functions that are most likely to be decentralized are payment reconciliation, cited by 49% of corporates, and accounts
receivable also cited by 49% of organizations. This was also the case last year (54% and 51% respectively).
 19

Banking
Channels
Banking Channels 20

Banking Channels

Corporates may use a variety of different channels to access their banking partners’ services, which can be challenging in itself, as they
must access multiple banks via separate channels, or multiple products from a single bank (or likely both). Each of these channels
will request different credentials from the user, introducing inefficiencies where the need to complete a time-sensitive transaction is
critical.

As was the case last year, corporates most commonly use a single integrated bank portal providing access to multiple services from
a single bank provider to connect with or access their bank. More than half (54%) corporates use this method, eight percentage points
than last year.

Channel Used When Connecting/Accessing Banks

(Percentage of Corporate Practitioners)

Single integrated bank portal providing access to

54%
multiple services from a single bank provider
65%
Multiple portals (separate channels for
38%
specific services at the same bank)

Via SWIFT solution 33%

Host to host connections 33%

Treasury workstation 32%

Single integrated bank portal providing access

to services from multiple bank providers 19%
24%
Mobile apps 14%

Service bureau 14%

Paper based / fax 13%

Third-party aggregator 7%

0% 10% 20% 30% 40% 50% 60%

Overtaking host to host connections, via SWIFT solution and treasury workstation as a main channel for accessing banks this year is
multiple portals. 58% more corporates are using multiple portals to connect to their banks this year than they were last year (38% vs 24%).

Meanwhile, about a third of treasurers are using SWIFT solutions, host to host connections and treasury workstations to access their
banks. The proportion of treasurers using SWIFT solutions (which offer corporates the ability to exchange financial messages with
whichever banks they please) hasn’t moved since last year, but the proportion of those using the latter two has increased, from 24% to
33% for host to host, and from 24% to 32% for treasury workstation.
Banking Channels 21

Channel Used When Connecting/Accessing Banks

(Percentage Distribution of Corporate Practitioners)

Which of the following channels do you use to access or connect with your bank(s)?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Single integrated bank

portal providing access to
54% 70% 37% 56% 33% 61% 40% 48% 43%
multiple services from a
single bank provider

Single integrated bank

portal providing access to
19% 10% 22% 33% 13% 21% 18% 25% 19%
services from multiple bank
providers

Multiple portals (separate

channels for specific 38% 27% 52% 39% 29% 47% 48% 44% 40%
services at the same bank)

Via SWIFT solution 33% 30% 22% 56% 33% 37% 34% 33% 34%

Treasury work station 32% 10% 48% 50% 29% 37% 40% 40% 40%

Host to host connections 33% 17% 30% 56% 38% 32% 36% 35% 38%

Paper based / fax 13% 13% 11% 17% 8% 21% 18% 10% 11%

Mobile apps 14% 17% 22% 6% 17% 18% 12% 10% 6%

Third-party aggregator 7% 10% 7% 6% 8% 11% 8% 4% 4%

Service bureau 14% 23% 7% 17% 13% 21% 14% 15% 17%

The channels used by different sections of the sample varied greatly. For example, larger companies are far more likely than smaller
organizations to use a single integrated bank portal providing access to service from multiple bank providers. They are also more
likely to use a SWIFT solution, or host to host connections. Understandably, larger organizations are using more of these channels than
smaller companies.
 22

Preferred
Bank Access
Preferred Bank Access 23

Preferred Bank Access

As was the case last year, the corporates’ most popular method of accessing banks is through a single integrated bank portal that
provides access to services from multiple bank providers. Just over a fifth (22%) of organizations selected this as their preferred bank
access method. However, more than a third (34%) of corporates selected it last year.

Falling a little out of favour from last year, single integrated bank portal providing access to multiple services from a single bank
provider was selected by 19% of corporates this year, compared with 24% in 2016.

Which methods are stealing share from single integrated bank portal providing access to services from multiple bank providers?
Many more corporates prefer host to host connections to any other bank access method when compared with last year. The proportion
of organizations selecting this method as their preferred nearly quadrupled from 3% last year to 11% this year. Similarly, the proportion
of corporates selecting treasury workstation as their preferred bank access method doubled from 7% in 2016 to 14% in 2017.

Preferred Bank Access Methods

(Percentage Distribution of Corporate Practitioners

Single integrated bank portal providing access

to services from multiple bank providers

Via SWIFT solution

4% 3%
4% Single integrated bank portal providing access
22% to multiple services from a single bank provider
5%

Treasury workstation
11%

Host to host connections

20%
14% Service bureau

Multiple portals (separate channels for specific

services at the same bank)
19%

Mobile apps

Third-party aggregator
Preferred Bank Access 24

Preferred Bank Access Methods

(Percentage Distribution of Corporate Practitioners)

Which of these would be your preferred method to access your bank(s)?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Single integrated bank

portal providing access to
19% 30% 19% 6% 21% 19% 13% 13% 19%
multiple services from a
single bank provider

Single integrated bank

portal providing access to
22% 20% 19% 24% 17% 22% 25% 19% 21%
services from multiple bank
providers

Multiple portals (separate

channels for specific services 4% 7% 0% 6% 4% 5% 0% 4% 2%
at the same bank)

Via SWIFT solution 20% 13% 19% 29% 21% 16% 25% 28% 28%

Treasury work station 14% 3% 27% 6% 17% 8% 8% 19% 11%

Host to host connections 11% 13% 4% 24% 13% 14% 17% 9% 11%

Mobile apps 4% 3% 8% 0% 4% 5% 4% 0% 0%

Third-party aggregator 3% 3% 0% 0% 0% 5% 2% 2% 2%

Service bureau 5% 7% 4% 6% 4% 5% 6% 6% 6%

This table shows that whereas smaller organizations (those with an annual revenue of less than $500m) are more likely to favour using
a single integrated bank portal providing access to multiple services from a single bank provider, larger companies (with an annual
revenue of at least $5bn) prefer – by far – a single integrated bank portal that provides access to service from multiple bank providers.

Larger corporates are also more likely to prefer using host-to-host connections when connecting with their banks – just under a quarter
(24%) selected this method as their preferred option. For these businesses, with annual turnover of at least $5bn, the most preferred
way of connecting to the banks is via SWIFT solution, with 29% citing this method.

When comparing preferences across geographies, SWIFT solutions emerge as by far the most popular method of connecting with banks
in North America and Western Europe, with 28% of organizations in both regions selecting it as their favourite. Two preferred methods
came top of the pile in Asia Pacific – via SWIFT solutions and single integrated bank portal providing access to services from multiple
bank providers – each cited by 25% of organizations in this region.

Organizations in North America, compared with those in Asia Pacific or Western Europe, prefer to use their treasury workstations to
connect with their banks – 19% cited this in North America, compared with 8% for Asia Pacific and 11% for Western Europe.

Public organizations are more than twice as likely as their privately traded counterparts to prefer to use a treasury workstation as a
bank access method (17% of public companies cited it as their preferred method, compared with 8% of private companies).
Preferred Bank Access 25

Types of Access to Bank Services

Once again, of the options given in the survey, mobile is the most widely provided method of access to corporate clients, with 58% of
banking services providers offering it to their clients. However, it appears growth in this area has stalled – 59% of banks said it was part
of their package last year.

The proportion of banks providing single sign-on as a type of access for their corporate clients increased by seven percentage points
compared with last year, from 44% to 51%. This overtakes last year’s second place type of access to bank services, integrated (one
portal for the bank for all services), which climbed modestly from 47% last year to 50% this year.

Types of Access to Online Services Offered to Corporate Clients

(Percentage of Banking Services Providers)

Mobile 58%

Single sign-on 51%

Integrated (one portal for the bank for all services) 50%

Integrated (shared multi-bank portal access) 37%

Open APIs 32%

Separate sign-on (for specific services) 28%

Do not provide online access 5%

0% 10% 20% 30% 40% 50% 60%

The proportion of banks offering open APIs access to services more than doubled from last year’s figure, from 15% to 32%. This is likely
a reaction to the introduction of PSD2, which mandates that banks make customer data available to non-bank payment players, with a
view to increasing competition and choice in the field.

APIs will play a large role in enabling this development, which is expected to bring us closer to an open banking standard. APIs,
or application planning interfaces, make it easier for software programmes to talk to each other, and can provide access to an
organization’s data and services. What this means for treasurers is faster connectivity, and real-time visibility of banking activity on
their treasury management systems.

The proportion of banking services providers not providing online access at all fell slightly, from 6% to 5%.
 26

Areas for
Improvement
Areas for Improvement 27

As we have already found, the majority of corporates is highly satisfied with the services of their banking partners. But do they believe
there are any opportunities for banks to improve their offerings?

For the third year running, harmonization of standards between banks was the most commonly desired area for improvement, though
to a greater degree this year – where half (50%) of corporate practitioners selected this as an area for improvement last year, 60% of
organizations cited it this year.

Desired Areas of Improvement for Banks

(Percentage of Corporate Practitioners

Harmonization of standards between banks 60%

More timely information (e.g., real time
instead of next day) 53%

Integration of data from many banks 53%

Seamless integration of corporate
to bank processes 46%
Single integrated point of entry
for all services 43%
Automated payment remittance and 43%
receivables tracking and reconciliation
Geographic coverage 33%
Greater support in service onboarding,
including set-up and data input 31%

Availability of online and mobile tools 30%

SWIFT connectivity 30%

Integrated forecasting 26%

Proactive guidance and advice 25%

Additional services (please specify) 5%

0% 10% 20% 30% 40% 50% 60%

Areas for Improvement 28

Integration of data from many banks is seen as far more important as an area for improvement this year compared with last. Where
36% selected it in 2016, more than half (53%) did so this year, the joint second most cited area for improvement in this year’s survey,
along with more timely information.

This increase in the proportion of corporates viewing integration of data as an important area for improvement may suggest that
treasurers have a better understanding of the potential of data, or that they are closer to realising the potential big data holds. The ability
to derive meaningful insights from data is a key differentiator among businesses across all sectors, offering gains in efficiencies and
cutting organizational costs.

For the treasurer, having access to different data sets and a means for analysing them in real time can make forecasting vastly more
accurate.

Desired Areas of Improvement for Banks

(Percentage of Corporate Practitioners)

What would most improve your banking services?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

More timely information

(e.g. real time instead of 53% 57% 52% 50% 42% 58% 56% 48% 53%
next day)

Harmonization of standards
60% 53% 67% 72% 54% 71% 58% 67% 66%
between banks

Single integrated point of

43% 47% 44% 33% 33% 58% 44% 50% 43%
entry for all services

Availability of online and

30% 43% 22% 17% 29% 37% 26% 21% 19%
mobile tools

Geographic coverage 33% 27% 30% 44% 25% 42% 42% 42% 40%

Integration of data from

53% 47% 59% 56% 46% 61% 52% 56% 49%
many banks

Seamless integration of
46% 37% 52% 56% 50% 45% 44% 50% 45%
corporate to bank processes

Automated payment
remittance and receivables 43% 47% 41% 44% 25% 53% 46% 35% 32%
tracking and reconciliation

Proactive guidance
25% 27% 19% 33% 17% 26% 20% 21% 21%
and advice

Greater support in service

on-boarding, including set- 31% 27% 26% 50% 33% 32% 30% 27% 30%
up and data input

SWIFT connectivity 30% 20% 30% 44% 25% 34% 34% 33% 32%

Integrated forecasting 26% 23% 26% 28% 29% 26% 26% 27% 23%

Additional services 5% 3% 4% 11% 8% 5% 4% 4% 6%

Harmonization of standards between banks is more of a concern for larger companies. In fact, the larger the organization, the more
likely it is to cite this as a desired area of improvement.
 29

Challenges
Challenges 30

Challenges Faced when

Integrating with a Bank for
Cash Management Services
For corporate practitioners, the joint most significant challenges faced when integrating with a bank for cash management services are
ease of integration into your environment and processes and KYC onboarding, each cited by 56% of organizations.

Although the proportion of corporates citing KYC onboarding as a challenge fell slightly from 60% last year to 56% this year, ease
of integration into your environment and processes has emerged as a challenge for more treasurers this year than it was in 2016.
Where just over a third (34%) of organizations selected it last year, this rose by 65% this year.

Challenges Faced When Integrating with a Bank for Cash Management Services
(Percentage of Corporate Practitioners)

KYC onboarding 56%

Ease of integration into your

56%
environment and processes

File formatting issues 52%

Differences between what was sold

42%
versus what is to be implemented

Testing procedures for new bank

33%
services including technology

Ease of integration across and with

33%
your current banking providers

Use of their security protocols

and procedures 31%

Other 4%

0% 10% 20% 30% 40% 50% 60%

File formatting issues also emerged as a greater challenge this year than last year, with just over half (52%) of corporates selecting it
as one of their biggest challenges when integrating with a new bank provider, compared with 45% last year.
Challenges 31

Challenges Faced When Integrating with a Bank for Cash Management Services
(Percentage Distribution of Corporate Practitioners)

What are the biggest challenges you face when integrating with a new bank provider?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

File formatting issues 52% 40% 70% 44% 42% 50% 55% 56% 49%

Differences between what

was sold versus what is to 42% 40% 37% 56% 42% 45% 43% 48% 43%
be implemented

Testing procedures for new

bank services including 33% 33% 33% 28% 13% 45% 33% 35% 32%
technology

Use of their security

31% 33% 26% 33% 21% 34% 29% 31% 30%
protocols and procedures

KYC on-boarding 56% 57% 48% 61% 54% 66% 63% 56% 66%

Ease of integration into your

56% 60% 59% 44% 50% 50% 49% 50% 47%
environment and processes

Ease of integration across

and with your current bank- 33% 37% 19% 44% 25% 34% 29% 33% 32%
ing providers

Other 4% 3% 0% 11% 8% 3% 4% 4% 6%
Challenges 32

Service Providers

We asked corporate practitioners whether they were using, or considering using, different types of financial services beyond their banks.
Our survey focused on four different types of non-bank service providers: FX providers, payment networks, supply chain finance, and
on-boarding service providers. For each of the non-bank services, no more than about a third (37%) of corporates were currently using,
or considering using them.

Non-bank Service Providers Used

(Percentage of Corporate Practitioners)

3%

Non-bank FX providers 17% 13% 68%

Non-bank payment networks 9% 7% 21% 63%

3%

Non-bank supply chain finance 4% 17% 76%

1%

Non-bank KYC and on-boarding service providers 4% 19% 76%

0% 20% 40% 60% 80% 100%

Currently using Will use in the next 12 months

Considering for the longer term Not considering

Of these four options, corporate treasurers were most likely to be using non-bank FX providers – 17% of treasurers are currently using
this, with 16% considering using it in the next 12 months or longer term. However, a far greater proportion, 68%, is not considering
using the service at all.

Just 9% of respondents are currently using non-bank payment networks, though 28% plan to start using this service in the next year or
beyond. Only 1% of respondents said that they were currently using non-bank KYC and on-boarding service providers.
 33

Challenges
for Banks
Challenges for Banks 34

Barriers to Growth

Of the 14 barriers to growth highlighted in the survey, those centred around regulation were the most commonly cited. Regulatory
complexity in new countries was the most cited barrier to growth by banking services providers, with more than half (51%) selecting it,
while regulations in existing countries was selected by 47% of banks.

Greatest Barriers to Bank Growth

(Percentage of Banking Services Providers)

Regulatory complexity in new countries 51%

Regulations in existing countries 47%

Systems limitations / scalability
of current infrastructure 46%

Fragmentation / silo of technology 42%

solutions and platforms
Competition 39%
Multiplicity of legacy channels/
poor customer experience 39%

Cost 39%
Disruption, new entrants and/or
changing business models 31%

Entry costs to new countries 24%

Sales capability (availability,
skills, training, tools) 22%

Discretionary funding / investment 19%

Changing or declining market demand 18%

Access to skilled labour, e.g. digital talent 17%

Cross selling in existing client base 16%

Other 4%

0% 10% 20% 30% 40% 50% 60%

Beyond regulatory concerns, systems limitations/scalability of current infrastructure emerged as a significant concern, with 46% of
organizations identifying it as a barrier, four percentage point up from last year.

Disruption, new entrants and/or changing business needs was selected by slightly less than 50% more organizations this year (cited
by 22% in 2016 vs 31% in 2017).
Challenges for Banks 35

Greatest Barriers to Bank Growth

(Percentage Distribution of Banking Services Providers)

What are the greatest barriers to your bank’s growth today?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Entry costs to new countries 24% 24% 38% 23% 23% 27% 29% 30% 30%

Regulatory complexity in
51% 53% 33% 62% 52% 57% 64% 63% 53%
new countries

Regulations in exiting
47% 39% 62% 45% 48% 41% 55% 50% 53%
countries

Multiplicity of legacy
channels/poor customer 39% 43% 48% 30% 31% 48% 34% 30% 30%
experience

Systems limitations /
scalability of current 46% 43% 48% 55% 45% 48% 46% 40% 43%
infrastructure

Fragmentation / silo of
technology solutions and 42% 45% 29% 43% 47% 34% 47% 45% 40%
platforms

Discretionary funding /
19% 10% 29% 26% 21% 16% 21% 20% 21%
investment

Sales capability (availability,

22% 29% 14% 15% 16% 25% 14% 17% 13%
skills, training, tools)

Cross selling in existing

16% 18% 19% 13% 14% 23% 16% 15% 11%
client base

Disruption, new entrants and/

31% 29% 38% 36% 37% 27% 39% 35% 34%
or changing business models

Changing or declining
18% 20% 29% 13% 24% 11% 17% 20% 16%
market demand

Competition 39% 49% 38% 36% 42% 41% 46% 35% 36%

Cost 39% 43% 48% 38% 37% 46% 42% 32% 36%

Access to skilled labour, e.g.

17% 18% 24% 11% 11% 23% 13% 12% 13%
digital talent

Other 4% 4% 0% 2% 4% 2% 5% 5% 3%

Comparing the responses across income bands reveals some stark differences in opinion about barriers to growth, particularly between
mid-sized companies (those with annual revenues of between $500m and $4.9bn), and smaller and larger banks (which respectively
make less or more than this band).

For example, regulatory complexity in new countries appeared to be a greater barrier for the smaller and larger banks than for
middle-sized organizations. However, mid-sized banks are more likely to see regulations in existing countries as a barrier, as 62% of
these organizations cited this compared with 39% of smaller banks and 45% of larger banks.

Mid-sized businesses are also more likely to find access to skilled labour a barrier – nearly a quarter (24%) of these selected access to
skilled labour, e.g. digital talent as one of their greatest barriers, compared to 18% of smaller organizations and 11% of larger ones.
 36

Reviewing
Relationships
Reviewing Relationships 37

Drivers for Change

Cost emerged as the most significant reason for reviewing banking relationships among both corporates and banking services providers
this year, with just over four-fifths (81%) of respondents selecting it. This is a 19-point increase on last year.

The second most cited reason, bank stability and reputation, was selected by nearly two-thirds (62%) of respondents – a dramatic
increase on last year when the equivalent option, bank stability, was only selected as a driver behind banking relationship review for 35%
of all organizations.

Reasons for Reviewing Banking Relationships

(Percentage of Corporate Practitioners and Banking Services Providers)

Cost 81%

Bank stability and reputation 62%

Improving the integration of

54%
services into your systems
Simplifying or consolidating your
52%
banking relationships

Improving end-to-end real time capabilities 46%

Improving digital customer experience / service 40%

Business growth outside of your current banks’

33%
geographic or industry coverage

Concerns with security 25%

Lack of credit facilities 19%

Forecasting 14%

Leveraging non-bank services,

10%
e.g. blockchain

Other 10%

0% 20% 40% 60% 80% 100%

Since last year, the proportion of organizations selecting improving the integration of services into your systems has fallen five points
from 59% to 54%. One respondent said that their banking relationships were always under review.
Reviewing Relationships 38

Reasons for Reviewing Banking Relationships

(Percentage of Corporate Practitioners and Banking Services Providers)

What is driving you to review your banking relationships?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Cost 81% 75% 92% 85% 86% 84% 82% 79% 80%

Bank stability and

62% 56% 75% 69% 64% 63% 63% 62% 60%
reputation

Improving digital customer

40% 44% 50% 39% 43% 47% 48% 38% 36%
experience / service

Improving end-to-end real

46% 44% 42% 46% 36% 58% 44% 35% 44%
time capabilities

Improving the integration of

54% 63% 58% 46% 43% 68% 44% 55% 52%
services into your systems

Lack of credit facilities 19% 25% 17% 15% 7% 32% 22% 17% 20%

Business growth outside

of your current banks’
33% 31% 50% 39% 29% 42% 52% 41% 52%
geographic or industry
coverage

Concerns with security 25% 19% 33% 31% 14% 32% 19% 28% 20%

Simplifying or consolidating
52% 38% 42% 69% 50% 53% 48% 59% 52%
your banking relationships

Leveraging non-bank
10% 6% 17% 15% 7% 16% 15% 10% 12%
services, e.g. blockchain

Forecasting 14% 19% 25% 8% 14% 16% 11% 21% 16%

Other 10% 6% 8% 8% 14% 5% 11% 7% 8%

Reviewing Relationships 39

Cost was a greater consideration for mid-sized companies than it was for their smaller and larger counterparts, cited as a driver for
banking relationship review for nearly all (92%) of thise surveyed. Smaller organizations are more likely to be driven to review their
banking relationships due to a lack of credit facilities – 25% cited this, compared with 17% of mid-sized organizations and 15% of
larger firms.

Publicly held and privately owned organizations appeared to have the most significant differences of opinion when it came to drivers
for review. For example, where just 7% of public organizations selected lack of credit facilities as a driver, nearly one-third (32%) of
private companies did. Private companies are more likely to be concerned with improving end-to-end real-time capabilities than
public companies – 58% of private companies cited this as a driver compared with 36% of public organizations.

There were also significant differences in option between public and private organizations when it came to improving the integration
of services into your systems (cited by 43% of public organizations v 68% of private businesses), business growth outside of your
current banks geographic or industry coverage (29% v 42%), and concerns with security (14% v 32%).
Reviewing Relationships 40

Rating Performance

The area in which corporate practitioners are most likely to rate their banking partners’ performance as ‘good’ or ‘excellent’ is security
record.

As was the case last year, just over half rate their partners’ understanding of the organization’s business and operations as ‘good’ or
‘excellent’, though that percentage was slightly lower this year (52% in 2017 compared with 56% in 2016). However, slightly more are
rating bank acts as a strategic partner and working for longer term solutions as ‘good’ or ‘excellent’ than they were last year (51% in
2017 compared with 45% in 2016). Just under a third (32%) of corporates rate their partners’ digital servicing capabilities highly.

Performance of Organization’s Current Banking Partners

(Percentage of Corporate Practitioners rating “good” or “excellent”)

Security record 56%

Banks provides credit 54%

Bank’s understanding of the organization’s

52%
business and operations

Face to face relationship management 52%

Bank acts as a strategic partner and

working for longer term solutions 51%

Conformance with industry standards 47%

Continually improving their products and

40%
services and providing innovation ideas

Ease of integration with current systems

and processes 37%

Digital servicing capabilities 32%

Other 20%

0% 10% 20% 30% 40% 50% 60%

Reviewing Relationships 41

Scope of Service

In a change from last year, when banks were split fairly evenly across the four different models, banking services providers are now most
likely to adopt a global banking model – more than two fifths (43%) of banks said that they provided this scope of service, compared
with 31% last year. A smaller proportion of banks are now adopting the regional banking model – 14% this year compared with 21% last
year.

Scope of Service Provided

(Percentage of Banking Service Providers)

21%

A global banking model

43% A regional banking model

Local banking with either global / regional model

22% Specialist or niche provider

14%
Reviewing Relationships 42

Scope of Service Provided

(Percentage Distribution of Banking Service Providers)

What scope of service does your organization provide?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

A global banking model 43% 34% 29% 69% 51% 37% 58% 63% 58%

A regional banking model 14% 9% 19% 19% 19% 11% 14% 14% 11%

Local banking with either

22% 21% 48% 13% 22% 20% 15% 14% 20%
global / regional model

Specialist or niche provider 21% 36% 5% 0% 7% 33% 14% 9% 11%

Unsurprisingly, larger banks are far more likely to be using a global banking model – 69% of banks with income of more than $5bn
a year are doing so, compared with 34% of smaller banks (with annual income of up to $500m) and mid-sized banks (with annual
income of between $500m and $4.9bn). Mid-sized banks are more than twice as likely as small banks and nearly four times as likely to
provide local banking with either global/regional model.
 43

Future Growth
Strategy
Future Growth Strategy 44

Models

As was indicated by the findings in the previous section, many banking services providers are moving towards a global banking model.
More than a third (36%) of banks said they were moving towards this model in this year’s survey, compared with a quarter (25%) last
year. Meanwhile, fewer banks are moving towards a regional banking model (11% this year compared with 15% last year).

Thinking about your future growth strategy, which of the following models are you moving towards?
(Percentage of Banking Services Providers)

17%

A global banking model

36%
A regional banking model
15%
Local banking with either global / regional model

Specialist or niche provider

11% Not currently moving towards any other model

20%

Banks are more likely to be moving towards a new banking model this year than they were in 2016 – where just under three-fourths
(73%) said they were moving toward one of four models as part of their future growth strategy in 2016, 83% said so this year.

Local banking with either global/regional model also appears to be gaining popularity as a potential banking model for banks. A third
more banks said they were moving toward this model this year than they were last year (15% in 2016 vs 20% in 2017).
Future Growth Strategy 45

Thinking about your future growth strategy, which of the following models are you moving towards?
(Percentage Distribution of Banking Services Providers)

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

A global banking model 36% 27% 38% 48% 36% 38% 46% 48% 41%

A regional banking model 11% 17% 14% 8% 11% 16% 4% 8% 14%

Local banking with either

20% 19% 29% 17% 24% 13% 24% 17% 20%
global / regional model

Specialist or niche provider 15% 23% 0% 2% 7% 18% 6% 6% 6%

Not currently moving to-

17% 14% 19% 25% 22% 16% 20% 20% 20%
wards any other model
Future Growth Strategy 46

Business Strategy

In an increasingly competitive market, the prevailing opinion appears to be that providing excellent customer experiences is a key
differentiator for banks. As more competitors can beef up their transactional capabilities, it will be the nature of the relationship with
their customers that determines which banks are most successful.

This was reflected in the findings of our survey. Innovation and customer experience are the two primary concerns for banks’ business
strategies this year, each cited by two-thirds of respondents (67% and 65% respectively). Along with customer experience, innovation
holds great potential for differentiation.

Innovation appears to be far more important for banks as an area of focus in business strategies this year than it was last year. Where
47% of banking services providers said that they were focusing it on it predominantly with regards to their business strategy last year,
67% did this year, a 43% increase year on year.

Areas of Focus in Business Strategies

(Percentage of Banking Services Providers)

Innovation 67%

Customer experience 65%

Compliance and regulatory change 44%

Cost efficiency 40%

Integration of services 28%

Cybersecurity 26%

Geographical coverage plans 7%

Other 7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Banks are also far more likely to be focusing on cybersecurity this year than they were last year, as 26% cited it as a predominant
focus in their business strategy this year compared with just 11% last year.
Future Growth Strategy 47

Those areas of focus that were overall deemed as less important this year than they were last year included cost efficiency, cited by
55% of banks last year compare with 40% this year, and integration of services (41% in 2017, 28% in 2016).

Thinking about your business strategy, which of the following areas are you predominantly focusing on?
(Percentage Distribution of Banking Services Providers)

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Cost efficiency 40% 47% 33% 33% 31% 46% 38% 41% 42%

Customer experience 65% 59% 81% 73% 81% 57% 70% 78% 76%

Innovation 67% 66% 71% 73% 68% 72% 65% 72% 73%

Integration of services 28% 32% 33% 17% 28% 26% 34% 17% 16%

Cybersecurity 26% 21% 19% 35% 22% 30% 29% 33% 28%

Compliance and
44% 34% 38% 46% 42% 39% 49% 41% 44%
regulatory change

Geographical coverage plans 7% 11% 10% 6% 8% 9% 6% 6% 6%

Other 2% 4% 5% 0% 0% 7% 1% 2% 0%

When compared with the rest of the pack, customer experience is a more important concern for mid-sized companies and public
organizations, with more than four-fifths (81%) from each of these predominantly focusing on these business strategies. Cybersecurity
is more likely to be cited as a focus for larger organizations than it is for smaller or mid-sized banks.
Future Growth Strategy 48

Mobile App Services

Now the treasurer has taken on a more strategic role in their organization, they are demanding constant, straight forward access to the
products they use on a day-to-day basis, so that they may work more nimbly and efficiently. But how much are banks committing to
providing their services in a way that can be accessed on a tablet or smartphone? In a new question for this year’s Transaction Banking
Survey, we asked banking services providers what kinds of products they were providing on mobile.

Banking Products Accessible via Mobile App

(Percentage of Banking Services Providers)

Cash Management Services 27% 56% 17%

32% 50% 18%

Reporting

Payables 28% 49% 24%

FX (including hedging) 18% 43% 39%

Liquidity solutions (including pooling / netting) 20% 36% 44%

Depository services 19% 34% 47%

Credit / lending 21% 31% 48%

Open account (supply chain financing) 15% 29% 56%

14% 29% 57%

Investment banking / capital markets

Trade finance (letters of credit, collections) 13% 28% 60%

0% 20% 40% 60% 80% 100% 120

Single product Multi product None

Cash management services were the most commonly offered banking product via mobile app, either as a single product or multi
product, with 83% of banks making this accessible. This was very closely followed by reporting, cited by a total of 82% of banks.

The three products least likely to be made accessible by mobile app are open account (supply chain financing), with less than half
(44%) the banks surveyed providing it, investment banking/capital markets, provided by 43% of banks, and ‘trade finance (letters of
credit, collections), cited by just 40%.
 Future Growth Strategy 49

Competitive Differentiation

Banks appear to understand the importance of being a strategic partner to their corporate clients, and their understanding their
clients’ business and operations, as the area thought to create the greatest source of competitive differentiation cited by most banking
services providers (81%) was acting as a strategic partner to their corporate clients and working for longer term solutions. This was
followed by bank’s understanding of the organization’s business and operations, selected by 71% of banks.

Areas Thought to Create the Greatest Source of Competitive Differentiation

(Percentage of Banking Service Providers)

Bank acts as a strategic partner and

81%
working for longer term solutions
Bank’s understanding of the organization’s
71%
business and operations

Digital servicing capabilities 68%

Continually improving their products and

67%
services and provide innovation ideas

Ease of integration with existing systems and processes 63%

Face to face relationship management 48%

Excellent security record 43%

Banks provides credit 37%

Conformance with industry standards 29%

Other 2%

0% 20% 40% 60% 80% 100%

Future Growth Strategy 50

Areas Thought to Create the Greatest Source of Competitive Differentiation

(Percentage Distribution of Banking Service Providers)

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Bank’s understanding of the

organization’s business and 71% 65% 81% 75% 70% 73% 73% 71% 73%
operations

Bank acts as a strategic

partner and working for 81% 79% 76% 89% 83% 82% 86% 84% 88%
longer term solutions

Bank provides credit 37% 42% 29% 40% 39% 40% 40% 44% 45%

Continually improving their

products and services and 67% 64% 67% 72% 67% 69% 72% 69% 73%
provide innovation ideas

Ease of integration with

existing systems and 63% 58% 62% 72% 66% 62% 78% 69% 67%
processes

Conformance with industry

29% 35% 19% 30% 26% 36% 35% 24% 26%
standards

Digital servicing capabilities 68% 65% 76% 75% 66% 78% 73% 66% 71%

Face to face relationship

48% 42% 62% 49% 46% 51% 47% 40% 46%
management

Excellent security record 43% 46% 29% 53% 44% 49% 49% 48% 46%

Acting as a strategic partner to its corporate clients was almost universally cited by larger banks (those with an annual revenue of $5bn
or more), with 89% saying it will create the greatest source of competitive differentiation.
Future Growth Strategy 51

Value Added Services

In a new question for this year’s survey, we asked corporates what value added services they would be predominantly looking for from
their banking partners.

Value Added Services Sought by Corporates

(Percentage of Corporate Practitioners)

Support in understanding upcoming

62%
regulations and changes
Support in leveraging new
49%
technologies e.g. blockchain

Enhanced working capital management 41%

Streamlined on-boarding / entitlement services 41%

Security advisory services 33%

Embedding financial products

into your business services 31%

Alternative supply chain finance platforms 28%

Alternative originations / loans options 26%

Identity management for third-party services 21%

Other 4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

For corporates, support in understanding upcoming regulations and changes would be a most welcomed service from their banking
partner, with nearly two-thirds (62%) of organizations citing this. Nearly half (49%) of corporates desire support in leveraging new
technologies such as blockchain as a value add.

Banks and corporates appear to align in what services would add most value. We have already seen that nearly half (49%) of corporates
crave support in leveraging new technologies, such as blockchain, from their banking partners – this was the second most cited value
added service they were looking for from their banks. Our research shows that banks understand this need, as of the options we gave, it
was the value added service most often cited by banks.

However, one area that more banks may need to consider more of a priority in their offering to corporates is support in understanding
upcoming regulations and changes. Where this value added service emerged as the most important for corporates, with 62% seeking it
from their partners, just 39% of banks said that they were looking to offer this as a priority.
Future Growth Strategy 52

Value Added Services Offered by Banks as a Priority

(Percentage of Banking Service Providers)

Support in leveraging new technologies

57%
e.g. blockchain

Enhanced working capital management 55%

Embedding financial products into your

50%
customers' business services

Streamlined onboarding / entitlement services 45%

Support in understanding upcoming

39%
regulations and changes

Alternative supply chain finance platforms 38%

Identity management for third-party services 23%

Cloud services 22%

Alternative originations / loans options 19%

Security advisory services 16%

Other 5%

0% 10% 20% 30% 40% 50% 60%

Another area where corporates and banks might not be seeing eye-to-eye is enhanced working capital management. More than half
of all banks (55%) are offering this service as a priority, despite just 41% of corporates seeking it. Similarly, where 50% of banks are
prioritising embedding financial products into their customers’ business services, this service is only sought by 31% of treasurers.
However, an area in which the two groups align again is streamlined on-boarding/entitlement services. Just over two-fifths (41%) of
corporates indicated this was important to them, compared with a similar proportion (45%) of banks who are prioritizing its delivery.
Future Growth Strategy 53

Value Added Services Offered by Banks as a Priority

(Percentage of Banking Services Providers)

When thinking about creating new revenue streams from value added services, which services are you looking
to offer corporates as a priority?

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Enhanced working capital

55% 55% 62% 65% 67% 57% 71% 66% 62%
management

Alternative originations /
19% 25% 10% 10% 14% 22% 19% 14% 16%
loans options

Alternative supply chain

38% 42% 33% 46% 40% 50% 50% 45% 38%
finance platforms

Streamlined onboarding /
45% 42% 43% 42% 50% 35% 41% 39% 39%
entitlement services

Security advisory services 16% 25% 10% 15% 8% 26% 16% 11% 13%

Identity management for

23% 21% 29% 23% 18% 30% 18% 20% 20%
third-party services

Support in understanding
upcoming regulations and 39% 43% 43% 40% 39% 39% 41% 27% 37%
changes

Support in leveraging new

57% 55% 62% 67% 58% 63% 64% 63% 56%
technologies e.g. blockchain

Embedding financial prod-

ucts into your customers’ 50% 55% 57% 42% 50% 54% 46% 36% 45%
business services

Cloud services 22% 30% 14% 15% 14% 28% 23% 19% 48%

Other 5% 6% 5% 2% 6% 2% 3% 3% 1%

Smaller banks (those with annual incomes of less than $500m) appear to understand the desire for security advisory services from
their clients better than mid-sized and larger banks. We have already seen that security advisory services are sought by a third (33%)
of corporates from their banks. But just 10% of mid-sized banks and 15% of large banks are prioritizing it as a value added services,
compared with 25% of smaller banks.

Generally speaking, the larger the bank, the more likely it is to prioritise enhanced working capital management as a value added
service, which misses to some extent what their corporate clients seek. However, larger banks are also more likely to be focusing on
supporting their clients in leveraging new technologies, which indicates an understanding of their clients’ needs in this area.
Future Growth Strategy 54

Other Partnerships

To improve operational performance, improve speed, service and efficiency, and to save costs, banking services may outsource some
of their non-strategic functions to specialist companies. We asked banking respondents which back office services they would consider
outsourcing, or partnering with other banks or service providers to fulfil.

The area banks were most likely to consider outsourcing to other service providers is open account supply chain finance, cited by
67% of banks. This is a significant rise from last year, when just 51% of banks considered outsourcing this back office service. A similar
proportion of banks would consider outsourcing payments to other service providers, with 65% citing this, a similar proportion to last
year (67%).

As was the case last year, of the six options in the survey, the area that banks are least likely to consider outsourcing is FX (54%). This
figure does however represent a modest rise from last year, when 50% considered outsourcing the service.

Bank Office Services Considered Outsourcing to Other Service Providers

(Percentage of Banking Services Providers and Corporate Practitioners)

Open account supply chain finance 29% 38% 33%

Payments 32% 33% 35%

Customer / supplier onboarding 22% 42% 36%

Trade finance services 28% 30% 41%

Corporate treasury management services 26% 32% 43%

FX 31% 23% 46%

0% 20% 40% 60% 80% 100% 120

To banks To service providers Neither

Future Growth Strategy 55

Transaction Services

As was the case last year, payments is the transaction service most banking services providers think to be most valuable to them if
delivered in an integrated and standardized way, cited by 85% of banks, a seven-point increase on last year.

Receivables is becoming an increasingly important transaction service for banks. It was the second most cited service this year (61%).
This marks a 10-point increase, placing it second in a list of the seven services we gave, a leap from fifth position in 2016.

Transaction Services Thought to Deliver Most Value

(Percentage of Banking Services Providers)

Payments 85%

Receivables 61%

FX 57%

Payables 57%

Trade finance 56%

Open account 40%

Forecasting 32%

Other 2%

0% 20% 40% 60% 80% 100%

Future Growth Strategy 56

Security

This year, we introduced new questions in order to compare banking services providers’ and corporate practitioners’ perspectives on
security. The results indicate that corporates and banks are somewhat aligned in their views on which group should oversee each
responsibility concerning security. The majority of both corporates and banks agreed that banks should take responsibility for real-time
payments.

The majority of respondents from either group also felt that both corporate practitioners and banking services providers should be
responsible for almost all of the options we gave. When it came to cyber attacks, more than four-fifths of all respondents thought
that both groups should be responsible for protection from cyber attacks (82% of corporate practitioners, 86% of banking services
providers).

Respondents were asked: Thinking about security, who do you think should be responsible for the following?
(Percentage of Corporate Practitioners)

1%
Real-time payments 52% 46%

Know Your Customer and 16% 33% 51%

On-boarding processes

Encryption of sensitive and customer data 11% 27% 62%

Protection from identity theft 8% 24% 68%

Protection from data theft 8% 20% 71%

Understanding upcoming regulations 4% 21% 75%

Adequate screening and timely notification 7% 14% 79%

of questionable / fraudulent transactions

5% 13% 82%
Protection from cyber attacks

0% 20% 40% 60% 80% 100%

Corporate Bank Both

However, while more than half (51%) of banking services providers thought that it was them that should be responsible for security
related to Know Your Customer and on-boarding processes (with just 4% of this group believing it should be the responsibility of
corporate treasurers), just a third (33%) of corporates thought that it should be banks’ responsibility, with 16% saying that it should
fall under treasurers’ remit.

Another small difference of opinion emerges when we consider protection from identity theft. Where 24% of corporate treasurers
feel this should be the banks’ responsibility, just 13% of banking providers this way.
 57

Thinking about security, who do you feel should be responsible for the following?
(Percentage of Banking Services Providers)

Real-time payments 5% 57% 38%

Know Your Customer and onboarding processes 4% 51% 45%

Encryption of sensitive and customer data 3% 32% 65%

Understanding upcoming regulations 3% 27% 70%

Adequate screening and timely notification 3% 18% 79%

of questionable / fraudulent transactions

Protection from identity theft 7% 13% 80%

Protection from data theft 4% 15% 81%

2%
Protection from cyber attacks 12% 86%

0% 20% 40% 60% 80% 100%

Corporate Bank Both

Whereas 81% of banking services providers thought that both corporates and banks should be responsible for protection from data
identity theft, just 71% of corporates thought the same.
Future Growth Strategy 58

PSD2: The Revised Directive on

Payment Services
With just a few months to go before all EU member states must comply with the Second Payment Services Directive (PSD2), which
comes into force in January 2018, we were interested to see what banking services providers are most concerned about when it comes
to the legislation, and whether there have been any shifts in attitude since last year. We asked banks what their primary concerns
surrounding the implementation of PSD2 were, and to select all that apply.

Primary Concerns Surrounding the Implementation of PSD2

(Percentage of Banking Services Providers)

Cost of implementation 45%

Security and cyber risks 44%

Variations in cross-border payments/

38%
country interpretation

Increased complexity of the payments sector 36%

Reduction of existing revenue streams 35%

Prospect of increased competition 32%

Not relevant / don't know 23%

Increased long-term costs 21%

Other 3%

0% 1%0 20% 30% 40% 50%

It looks as though although a year has passed, the same concerns about PSD2 exist, and often to a slightly greater extent.

Once again, and with exactly the same percentage of banks selecting it (45%), the most cited concern about PSD2 was cost of
implementation. This was closely followed by last year’s second placed concern, security and cyber risks, cited by 44% of banks.
Future Growth Strategy 59

Primary Concerns Surrounding the Implementation of PSD2

(Percentage of Banking Services Providers)

Asia North Western

Value All <$500M $500M-$5BN >$5BN Public Private
Pacific America Europe

Cost of implementation 45% 54% 24% 44% 43% 47% 49% 37% 39%

Increased long-term costs 21% 29% 14% 21% 18% 31% 26% 24% 21%

Prospect of increased com-

32% 33% 43% 29% 24% 42% 36% 32% 37%
petition

Increased complexity of the

36% 33% 19% 48% 32% 42% 40% 35% 39%
payments sector

Reduction of existing
35% 39% 38% 40% 32% 51% 41% 38% 42%
revenue streams

Variations in cross-border
payments/country 38% 39% 43% 44% 31% 58% 47% 48% 47%
interpretation

Security and cyber risks 44% 39% 38% 60% 43% 53% 51% 48% 54%

Not relevant / don’t know 23% 17% 33% 15% 25% 11% 15% 19% 11%

Other (please specify) 3% 2% 0% 2% 3% 2% 0% 2% 3%

Smaller banks are more likely to be concerned about the cost of implementing PSD2 than mid-sized or larger banks, as more than half
(54%) cited this as a primary concern (compared with 24% of mid-sized banks and 44% of larger banks). This was by far the most cited
concern for banks making less than $500m a year, followed by reduction of existing revenue streams, variations in cross-border
payments/country interpretation and security and cyber risks, each cited by 39% of smaller banks.

Of the three income bands, it is the mid-sized banks who look to be the least concerned about cost of implementation, with just 24%
of banks earning between $500m and $4.9bn citing this as a concern.

Mid-sized banks are more likely to be concerned about the increased competition PSD2 might bring to the field, as 43% selected it,
making it the most cited concern in this income band. Variations in cross-border payments/country interpretation was just one
point behind this, with 43% of mid-sized banks selecting it as a concern.

For larger banks (those with an annual income of more than $5bn), security and cyber risks are the most pressing concern. With 60% of
banks selecting this, it was the most cited concern in the income band. Respondents also named loss of data awareness and clients rushing
to PSD2 without first streamlining their processes as concerns about the directive, though one said they saw it as an opportunity.
Future Growth Strategy 60

About the Survey

GTNews conducted the 2017 CGI Transaction Banking Survey from June to July 2017. The survey was sent to GTNews corporate
practitioner subscribers and banking services providers. The primary purpose of the survey was to better understand attitudes and
emerging trends in banking services and also to identify how banking services are meeting the needs of finance professionals.

More than 300 responses were received from about 140 corporate practitioners working in their organization’s treasury or finance
function and 240 banking services providers. Due to the sample size obtained, regional analysis was limited to responses from those
financial professionals whose businesses operate in the Asia Pacific, North America and Western Europe regions.

GTNews would like to thank CGI for its underwriting support of the 2017 Transaction Banking Survey.

The tables below present the demographic profile of survey respondents.

Type of Organization
(Percentage Distribution of Organizations)
Corporate practitioner working in my organization’s treasury/finance function 37%

Banking services provider 63%

Annual Revenue (USD)

(Percentage Distribution of Organizations)
Under $50 million 22%

$50-99.9 million 5%

$100-24.9 million 7%

$250-499.9 million 8%

$500-999.9 million 6%

$1-4.9 billion 19%

$5-9.9 billion 9%

$10-20 billion 9%

Over $20 billion 16%

Ownership Type
(Percentage Distribution of Organizations)
Publicly Held 32%

Privately Owned 50%

Non-Profit 4%

Government (or government-owned entity) 15%

 61

Industry Sector
(Percentage Distribution of Corporate Practitioners)
Banking/Financial services 9%

Business services/Consulting 12%

Construction 1%

Energy (including utilities) 8%

Government 8%

Health Services 8%

Hospitality/Travel 4%

Manufacturing 9%

Non-profit (including education) 3%

Real estate 5%

Retail (including wholesale/distribution) 8%

Software/Technology 11%

Telecommunications/Media 1%

Transportation 1%

Other 11%

Geographic Region
(Percentage Distribution of Organizations)
Asia Pacific 62%

Central & Eastern European 47%

Latin & South America 33%

Middle East & Africa 42%

North America 53%

Western Europe 56%

Disclaimer:
For all questions in this survey the data recorded has been rounded to the nearest whole number for clarity. For this reason, total responses for
a number of data fields may total 99% or 101%.
 62

Conclusion
Conclusion 63

Conclusion

This year, the Transaction Banking Survey goes to press just before a wave of significant change in the banking sector and beyond, with
the introduction of the regulations PSD2 in January 2018, and GDPR, which will govern data protection, in May.

The challenges presented by these regulatory changes will demand strong relationships between banks and corporates, however, as
the findings in this year’s survey suggest, banks and corporates are not entirely aligned with their priorities going forward. For example,
there was a mismatch between which services are most sought by corporates, and which were offered by banks as a priority. While a
third of corporates seek security advisory services as a priority, just 16% of banks are offering it.

On a more positive note, however, the survey findings indicate that banks understand the importance of customer experience as a key
differentiator, a factor that will become yet more important with the predicted influx of non-bank players entering the market after
PSD2. As incumbent banks may struggle to compete with nimbler challenger banks in some respects, providing excellent customer
experiences will keep them ahead.

It is worth adding here that PSD2 could, as one respondent to the survey noted, present great opportunities for banks, as an open
API standard can enable the higher quality customer experiences that are now expected. It’s promising that the percentage of banks
offering open APIs has more than doubled over the last 12 months, for as we noted in last year’s report, it is those who embrace the
Open API Economy who will succeed. Indeed, the next 12 months will be crucial for all players involved.