The future of treasury management operating models

Who are the digitally native and naïve?

Through market research and one-on-one discussions with treasury management leaders, we identified two segments differentiated by behavior: the naïve and the native. Naïve clients leverage highly manual treasury management processes built on legacy ERPs. While they are evolving, their pace of change is not fast enough to keep up with overall evolution in the industry. Native clients manage their business with digital technologies with decisions based on data-driven insights. They are driving toward “the next thing” and often push the boundaries of the industry.

Why does it matter?

Across the native and naïve spectrum, client needs are diverging. This shift is across three main areas: their relationship preferences, the products they need, and the expectations of their banking partner’s operating model. Addressing these changing expectations requires banks to incentivize change for key decision-makers , simplify implementation and adoption, and build solutions driven by client needs instead of pure product innovation.

Evolving client needs require a shift in operating model

As client needs evolve, the type of bank partner they are looking for is also evolving. Historically, banks have designed their treasury management operating model to support the needs of digitally naïve clients with a product-centric alignment; investments have been focused on modernizing aged technology to sustain legacy products and marginally improve processes versus understanding and meeting new client needs.

Going forward, banks need to reorganize around the changing needs of their digitally naïve clients, as well as new demands from a growing set of digitally native clients, which requires banks to move from incrementalism to transformation. In other words, fundamentally rearchitecting their operating model.

Taking action: What should banks do?

Banks that invest and plan now are best positioned to be the differentiators and grow their treasury management business. For the foreseeable future, banks will need to manage the coexistence of both client groups. Download our full report to learn how to serve clients along the transformation spectrum and tactics that can help evolve the naïve into the native.