What do corporate treasurers expect from Fintech’s?

Listen to customers

According to Jonathan Midenhall: “Amazing things will happen when you listen to the customer”. It is a key statement Fintech’s should always keep in mind as sort of general mission. They must listen to their treasury customers but also understand what they really need. When you try to sell to a new market or new types of potential customers, you need to precisely understand the issues and what could help them to sort these issues out. The business model is also important because even the best solution, if too expensive or if cost is not proportionate to benefits, will not be “sellable”. Therefore, this question is an interesting question to be addressed and often forgotten I must confess. Fintech’s are developing solutions and I have the impression that sometimes, at least some of them, forget to contemplate what treasurers are really expecting from them. Even if you produce the best product ever, the smartest solution, never forget that you then need to convince end-users, i.e. treasurers and “real economy” to adopt it.

Who are the successful Fintechs?

The most efficient and successful Fintech’s, as far as I know, have understood the expectations, propose an excellent product at a proportionate pricing (i.e. good or rapid pay-off, acceptable ROI). The good news, there are many areas in Treasury where we face problems or have too manual processes and where Fintech’s may be “the solution” (e.g. FX management, KYC, BAM, bank fees, compliance, international and exotic payments, AML and sanction screening, trade finance, etc…).

Treasurer’s expectations

Treasurers expect first solutions to existing and priority problems current providers, IT vendors, banks and infrastructure providers cannot offer (yet). They also want to get (more) comfort on the sustainability of the fintech partner, on its financial stability and if there is potential of standardization in the solution proposed. They do not want to choose the wrong standards or the wrong technologies. And among hundreds of fintech’s and jungle of solutions, it is extremely complicate for treasurers to find their way and to identify the best-of-breed applications or platforms. It is fair to say that treasurers can be more comfortable when banks invest in fintech’s, when banks are partnering with tech companies or when API’s are applied to bank systems to offer new features and functionalities (thanks to PSD2). An important expectation is also to bring “added value” and ideally cheap or reasonable solutions, even if not free. Fintech’s solutions being often viewed as additional layers to existing and key back bones (e.g. TMS, ERP, Payment factory,…), they should complement them perfectly and at a fair pricing. Another critical expectation comes from the CIO’s. It is related to IT security and how to ensure compliance with company security standards. Without being comprehensive, I would also add important elements: e.g. showing reference customers (to benchmark), clear case studies and among others presence at Associations and conferences level. Being present at Associations’ events and conferences help giving visibility to fintech’s.

A Tetris game

I always thought that fintech’s have the answer and that we treasurers have the question. Instead of coming with an answer without knowing the question, Fintech’s should answer a precise question. If they put the cart in front of horses, the risk is to come with unsuited and non-adapted solution for corporates. Another comment, often heard, is related to the underuse of full functionalities of some solutions, because they are maybe over-sophisticated. I see the treasury IT landscape as a Tetris game where these fintech’s could fill holes and complete lines. But again, even if you have a good technology, a decent price and fulfilling gaps, communication is important. Although communication and marketing are often limited or forgotten. You will never catch flies with vinegar, as the old French saying claims. Know-ledge is obviously key; but marketing is as important as technology itself. The link between fintech suppliers and end-users is too often missing. They need to inform and communicate, but not only as they need to “educate” somehow. A fintech must remain pragmatic, not over-sophisticated and bring easy to implement solutions. The more plug-and-play they are, the better, I would say.

A bemol for Fintech’s

Treasurers are sometime scarred, shy, reluctant, not open to changes, not curious enough, and too conservative vis-à-vis new tech solutions. Disruption is something that may be difficult to accept or on-board for some treasurers, usually by nature conservative and prudent. Normal, men would think for risk managers, isn’t it? Therefore, it may sometime be challenging to convince treasurers of a great solution. Treasurers are busy men/women, with lack of human resources in their departments and focus, in priority, to daily activities and key priorities. If a problem is not a major one, it may be pushed forward and solved later. It is a frequent risk Fintech’s are facing. They have an excellent solution but are not able to convince treasurers of the benefits they could get out of it. The marketing and packaging of these new financial services and solutions remain difficult and require specific resources and budget to pass messaging. It may take a while, as in treasury, decisions may take more time than in other areas. Patience is the key quality for Fintech’s, as well as persuasion to efficiently sell solutions to corporates. That is a major challenge, and they should consider investing more of their means into communication, marketing, analysis of the end-user’s expectations, packaging of solutions and presence into treasury associations.

Fran?ois Masquelier, Chairman of ATEL