Navigating the Future: Industry Trends in Treasury
Meet the challenges; seize the opportunities
Historically, the commercial banking and payments space has been a pretty slow-moving organism. Stability, predictability and gradual evolution, rather than disruptive change, were the order of the day – for financial institutions, corporate treasury departments and the technology providers that served them.
Well, things are different now. In all of financial services – and in the day-to-day for corporate treasurers – change is happening more rapidly than in the past. Amid a perfect storm of regulatory changes, fintech competition and client demands, corporate treasurers are seeking best-in-class solutions, and they're willing to switch providers to get them. That has many financial institutions playing catch-up. They are faced with modernizing their technology and operations, and learning to manage new risks, to stay competitive.
In 2025, the winners in this game will be financial institutions that successfully address both the technology and customer challenges, head-on.
The current research
Datos Insights is a leading research and advisory firm for the banking, insurance, securities and payments technology industries. In their most recent survey of developments shaping the commercial banking and payments arena, Datos Insights identified five major trends. All of them reveal opportunities for financial institutions willing to take action.
Trend #1: Real-time demand is fueling a surge in investments in banks
According to the Datos Insights research, 61% of businesses increased their use of real-time payments (RTP) last year, and 60% of businesses expect their RTP usage to increase in the next 12 to 24 months. This growth creates an urgent need that banks must be ready to support. And, indeed, financial institutions are responding – 96% of banks surveyed are investing heavily in payment modernization to stay competitive.
But the key for financial institutions will be to solve for their clients’ biggest pain points. In ranked order, financial institutions say they are most concerned about:
→ Speed of payment/settlement
→ Visibility of payments in real-time
→ Integration into ERP/accounting systems
→ Resolving customer inquiries
→ Recipient satisfaction
Time is of the essence. Businesses are already looking at other options – turning to fintechs for services that were once traditional financial institution offerings. Of businesses surveyed, 58% are already using a fintech for a core cash management or treasury service. And 25% of businesses plan to use a fintech in the future.
Conclusion: Banks will be unlikely to reach their payment volume growth goals without investing in real-time capabilities, and deploying them in a way that aligns with business-customer objectives and meets the fintech competition.
Trend #2: Banks see revenue opportunities with ISO 20022 following Fedwire migration
When the International Organization for Standardization (ISO) established the ISO 20022 global messaging standard for financial business transactions, it wasn’t just to create a new compliance hoop for businesses and financial institutions to jump through. The standard is designed to increase speed and efficiency in real-time payments, while improving transparency and reducing fraud.
Businesses are proving to be enthusiastic about ISO 20022. In fact, 90% of businesses have either already adopted ISO 20022 formats, plan to use them in the future or want to learn more about them.
As the ISO 20022 message format is fully adopted by the Fedwire Funds Service this year, financial institutions should see the migration as a strategic opportunity to enhance customer experiences, drive new revenue streams and establish a competitive edge.
Many institutions understand this. When asked what benefits and value-added services might result from the enhanced data and messaging in ISO 20022, the banks responded:
65%
Enhanced reporting
50%
Standardization of integrations with clients and other systems
38%
Better bank-to-bank
instructions
29%
Improved fraud detection and risk management
26%
Expanding international capabilities
21%
Smart payment
routing
21%
Enhanced settlement
and cash management capabilities
Conclusion: ISO 20022 does create a new opportunity, but financial institutions must seize it. Institutions should pursue ways to further enhance and provide analytics for the enriched data provided, to add value for their business customers.
Trend #3: ERP banking puts an end to “swivel-chair” finance
Enterprise Resource Planning (ERP) is software designed to help organizations and businesses streamline their core operations for speed and efficiency. These operations include:
- Accounting
- Risk management
- Project management
- Supply chain management
- Human resource functions
An overwhelming number of businesses want to be able to throw banking into that mix. In fact, 88% of midsize and large corporate enterprises say that running banking operations from their enterprise system is important or very important. ERP banking makes sense, since the businesses say their top three ERP operations are payments, cash management and outgoing billings/invoices.
Perhaps ERP banking’s most significant impact is the improved efficiency gained by eliminating the need for users to switch between different systems – often referred to as “swivel-chair” operations. Corporate treasurers are looking for the convenience of integration, and will rely on their financial institution to provide it.
ERP banking isn’t a fixed offering; it’s an evolving practice. A financial institution may start out doing host-to-host file transfers, and add other emerging ERP connection options from there – bank APIs, ERP gateways, ERP feeds and ERP banking connectors (see graphic). This is an additive process; banks will need to support a growing variety of connections to support ERP banking functions for their customers.
Conclusion: Businesses want to integrate more seamlessly with their banks and exchange information in a way that is timely and efficient for them. This is yet another frontier of value-added service that financial institutions must be ready to explore.
Trend #4: Complex regulatory outlook prompts focus on risk management
The regulatory environment for both businesses and financial institutions is changing rapidly because new risks are emerging. That means giving full attention to risk and coming regulatory obligations in several categories.
Environmental, Social and Governance (ESG) and climate change. Among the enterprises surveyed, 74% said ESG and climate change were a strong or moderate focus for them. How can financial institutions help? One bank provides an online service businesses can use to calculate their carbon footprint. Banks could become a trusted source of information in this area.
Geopolitical risks. International regulations are evolving, and the effects of war, trade policy and other changes in the world economy create uncertainty. Managing these risks on a global basis will continue to be a challenge.
Third-party risk. Businesses that are offering or using banking as a service, where money is passed through an intermediary third-party bank, have risk exposure to the actions of those third parties.
Technology. European regulations about resiliency and redundancy, and requirements concerning how IT infrastructure can withstand outages, will likely make their way to the United States.
There’s also European regulation relating to artificial intelligence. The European Union passed its AI Act in 2024, which is a fairly comprehensive piece of legislation for governing AI and how businesses use it. In the U.S., state-level regulations continue to develop, but no federal legislation has yet been signed into law.
Conclusion: Traditional risks will remain for businesses and financial institutions, but emerging risks create new vulnerabilities. Financial institutions that can achieve proper compliance to reduce risks, satisfying the expectations of both customers and regulators, while improving end-user and partner experiences, will be able to continue developing monetizable products.
Trend #5: Automated finance evolves with intelligent decisioning
Automated finance is a term that describes the automation of the functions of the office of an organization’s chief financial officer (CFO). From the research we know that 50% of businesses are interested or very interested in using an automated accounts receivable/accounts payable (AR/AP) solution. A third of businesses already use such systems, and 76% of businesses that don't use them are looking to implement one in the next few years.
The need for automation in these businesses is acute, because the office of the CFO is often hobbled by a number of legacy challenges, especially in the area of AR/AP processing:
- Businesses using multiple systems
- Data disbursed over many systems
- Manual tasks and disjointed processes
- Lack of visibility to cash flow
That kind of trailing-edge processing paradigm can’t succeed when we consider the market trends currently influencing the office of the CFO:
- Increased adoption of electronic payments
- Increased demand for embedded finance and API integration
- Artificial intelligence (AI) becoming an expectation
- Rising security and fraud incidents
- Unified platform for AR and AP
- Programmable payments utilizing smart contracts
In this environment, large corporates that deal with multiple banks want a standard, automated tool for AR/PA where they can pull in all their information into one place.
Automated finance, fueled by AI, helps improve efficiency, decision making and the financial health of a business by automating tasks such as payables, receivables and even cash forecasting. The systems bring all financial information into a single platform where businesses can run their processing and see their cash flow positions in real time, with special safeguards for risk, fraud and security.
There is a surge in the adoption of these technologies, and it is reshaping how businesses run their back offices.
Conclusion: Financial institutions that move swiftly to provide automated finance solutions across all business segments will optimize cash flow management, increase deposits and deepen client relationships with corporate customers. Many financial institutions partner with third-party providers to offer these solutions. Then the financial institution maintains its status as trusted advisor to businesses looking for this trusted technology.
TA call to action
Why are these trends important to financial institutions? Because the institutions are at risk of losing revenue and their most critical customers. The combined challenges of increased competition, more complex products, a more demanding customer base and growing penetration by fintechs has created a real threat.
The Datos Insights survey found that over 25% of corporate treasurers at midsize and large companies state they definitely or probably will switch financial institutions over the next two years.
The financial institutions that stave off these departures will be the ones that are fully engaged with their customers, showing them how the institution is moving forward to meet the changes in the marketplace. If corporate customers see their current provider as a thought leader and a provider of needed products and services, they're much more likely to stay.
It’s fine to make progress in steps, posting small wins and constantly making positive changes. But continual improvement means making sure the right technology and partners are in place for quick adaptation to change.
The Fiserv approach
Fiserv offers a family of integrated applications that enable more efficient and cost-effective treasury management. With Fiserv solutions, you can:
- Take advantage of immediate cost savings in staffing, computing capacity, physical footprint, maintenance, upgrades and implementation
- Rely on industry-leading security while streamlining and automating back-office operations in real-time to reduce the risk of fraud
- Increase operational efficiencies while eliminating unnecessary capital expenditures, reducing costs and minimizing losses due to fraud
- Get a complete view of your client relationships and transactions with real-time, easy-to-access data and analysis
