2012 Treasury Services Outlook
Treasury Services Offer Banks a Big Opportunity
By Marc Harrison, Consultant, Greenwich Associates (Stamford, Conn.)
Treasury services is a growing part of many banks' businesses. It's a fee-based business, so even if there's not a whole lot of lending activity going on, or a whole lot of capital markets activity, treasury management is a very attractive business to be in.
Coming out of the credit crisis, banks recognized that treasury services represented an important revenue stream. Treasury is a highly automated and technology-driven business, and banks continue to invest in portals and other technological enhancements to product delivery to meet corporations' specific needs.
Corporations say they need tools to be able to recognize their cash balances more quickly. In addition to visibility of cash, corporations are asking for the ability to seamlessly move money from Point A to Point B, which generally can be accomplished electronically. This means they're less reliant on paper for tasks such as payables.
Banks now are focusing on how they can seamlessly connect clients to different electronic channels. First is the host-to-host channel, enabling companies -- particularly large corporations -- to upload files without manual intervention. While this has traditionally been done through client/server environments with dedicated hardware, clients also want to have this ability using the web channel, so the electronic channel has grown in terms of importance. Corporations want to use the Internet platform from their banks as the single source of truth -- or the one place they'll go to first -- for a multitude of service-related tasks, such as investigating the status of an unpaid item.