Core Systems

04:00 PM
Connect Directly
RSS
E-Mail
50%
50%

Corporates’ Wishes Are Banks’ Commands

To retain demanding corporates in an increasingly competitive market, banks work to anticipate their treasury and cash management needs. Automation, integration and standardization are just the beginning.

Ask just about anybody in the industry and they'll tell you that competition in the treasury/cash management space is heating up like never before. In the same breath, however, insiders also will point out that the opportunities in the treasury space never have been greater than they are now.

There is no doubt the competitive landscape in the treasury/cash management space is undergoing a significant transformation. Between industry consolidation and the entrance of new players in the market, banks have their work cut out for them when it comes to serving business customers and meeting their demands. >>

"You have consolidation among the banks, you have competitors coming from other parts of the world and third parties offering cash management features to compete against banks," comments Susan Feinberg, senior analyst with TowerGroup's wholesale banking research service. "The competition is formidable."

Incumbent players are being assaulted from all sides as interlopers increasingly encroach upon their domain in the treasury/cash management realm, Feinberg continues. "Fifteen or 20 years ago, it was easier to compete if you were a top-50 bank because you had a certain natural client base," she explains. "Today, because geography has become less important and as big banks consolidate and increase their footprints, if you're not in the top tier, it's extremely difficult to compete."

According to Julie Monaco, head of the cash management business at New York-based JPMorgan Chase ($1.3 trillion in assets), adding to the competition is the fact that the treasury/cash management market in the United States has been experiencing slow growth. As a result, she says, banks are starting to target each other's market share. "On top of this, you have nonbank competitors coming in with different cost structures. And they can sometimes leapfrog banks a bit because they don't have the historical infrastructure to deal with," Monaco adds.

Even small and midsize banks are clamoring for a piece of the action. According to Dan McCarty, senior vice president of treasury management services with Detroit-based Comerica ($56.4 billion in total assets), with improvements in technology, the barriers to entry into the treasury/cash management space have been lowered. As a result, there are more small financial firms offering treasury services on an outsourced basis.

Previous
1 of 5
Next
Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Oct. 14, 2014
Bank Systems & Technology's new Must Reads is a compendium of our best recent coverage of customer analytics. Learn what big data means for banks, meet Wells Fargo CDO Charles Thomas, find out how to connect with your Gen Y customers, and more.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.