The Future of Payments: Series 2 Part I, Post Covid-19 — Deutsche Bank Research (13 January 2021)
Summary
Deutsche Bank Research report dated 13 January 2021, The Future of Payments: Series 2 Part I. Post Covid-19: What Executives Are Thinking and Doing, by Marion Laboure, Ph.D. and Jim Reid. The summary page says the report presents results of a survey of more than two hundred executives (CFOs, treasurers) across Europe and forecasts of trends in cash management, mobile payments, cryptocurrencies and blockchain. It lists four trends, including traditional B2B businesses entering B2C and centralization of cash management, and states that e-commerce has risen by 50% in Europe since March. It also says between 20% and 50% of treasurers intend to implement virtual accounts this year.
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The Future of Payments: Series 2
Part I. Post Covid-19: What Executives
Are Thinking and Doing
#PositiveImpact
Marion Laboure, Ph.D.
Research Analyst
+44-207-545-0679
Jim Reid
Strategist
+44-20-754-72943
Corporate Bank Research 13 January 2021
Summary on a Page
In January 2020, we released our consumer survey titled The Future of Payments (Part I, Part II, and
Part III). Today, we release the results of our proprietary survey of more than two hundred executives (CFOs,
treasurers) across Europe, and release our forecast of trends in cash management, digitalisation, mobile
payments, cryptocurrencies, and blockchain.
Covid-19 disruption to business has reshuffled priorities for CFOs and treasurers. They must
address how to: maintain access to liquidity /credit; implement back-up procedures; create visibility to total
cash in global locations; determine cash requirements in the short and medium term; and assess current
exposures.
Transforming business models is a key theme emerging from our survey of more than two
hundred CFOs, with four discernible trends:
1. Traditional B2B businesses entering B2C and a growing interest in e-commerce. E-commerce
has risen by 50% in Europe since March and we expect sustained online volume growth of more than
50% globally in 2021 and 2022. This will trigger the need for innovative collections solutions.
2. A move toward real-time treasuries. CFOs are willing to monitor and be notified about real-time
account balances. They believe that instant payments, application programming interfaces (APIs), and
open banking will be the technologies/services with the biggest impact on B2B payments over the next
two or three years.
3. Usage of cash applications. Automated accounting and reconciliations systems, and e-invoicing
technologies are expected to increase.
4. Centralisation of cash management. Treasurers are willing to rationalise bank accounts; between
20% and 50% of treasurers intend to implement virtual accounts this year.
Top challenges Sources of efficiency gains
−− Fraud/security exposure related to payment −− Cashflow forecasting
activity −− Bank account management
−− Errors and time spent on manual payments −− Invoice processing
−− Bank KYC/documentation or other −− Payment initiation, receipts, and reconciliation
compliance issues −− Order processing purchases
−− Obtaining timely access to all transactions −− Management analysis
occurring globally −− Fraud/security management
−− Keeping up with technology changes
−− Inefficiencies created by legacy payment
solutions
Authors
Marion Laboure, Ph.D. | marion.laboure@db.com
Jim Reid | jim.reid@db.com
Deutsche Bank Research / The Future of Payments: Series 2. Part
Post I. Post Covid-19:
Covid-19: What What Executives
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Our Favorite CFOs Quotes Selected
From 200+ Interviews
Blockchain APIs
Blockchain is a very APIs are great but banks
interesting technology need to align on a single
Fraud /
but for now, I haven’t format.
seen yet any immediate Cyber-security
nor very short-term
application to treasury. We are very aware of all Years ago, Swift was
the common benefits of welcomed as the long
virtual accounts; now, we awaited, bank-agnostic
We believe that actually see them as a connectivity mode; the
blockchain will find powerful solution to fight way APIs are deployed
applications for treasury fraud on bank accounts. and offered should not
and are ready to pilot and constitute a step back
experiment on specific nor add more complexity
use cases. Recent headlines show for treasury.
that no corporate
can afford not to put
cybersecurity at the very
top of their priorities.
Cash
Petty cash is our
Real time nightmare. RTP
We treasurers have the The challenge of RTP for
responsibility to follow Cash is not in our us has been to integrate
the pace of regulatory corporate policy this new payment
changes and the entry anymore; now, we still mode into our treasury
of new players in the have resisting pockets processes.
payment/treasury field. of petty cash here and
there, and are looking
at any way to get rid of We see RTP as the most
The pandemic has been it, i.e., to find a suitable cost efficient way to
a game changer in the collection mode that support a marginal shift
way treasurers have would replace it. of part of our business
approached real time. towards B2C: If only we
could afford to offer it as
sole payment mean!
Never before had our
very CEO been asking
daily for the group’s Everybody today has a
global cash position… bank account, so working
on the right customer
journey for RTP is critical
so that it gets broadly
adopted – This would
enable us to save a lot of
money!
Deutsche Bank Research / The Future of Payments: Series 2. Part
Post I. Post Covid-19:
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Virtual accounts Machine learning
Virtual accounts could We believe that machine
enable us to extensively learning could further
broaden the reach of our help prevent fraud when
in-house bank. it comes to transactions.
Cheques
Cheques – oh wait,
and cash! – are our
nightmare.
Automation
Process and automation
Payment Gateway have become the Fintechs
Providers gatekeepers of human
errors and fraud. We believe that banks,
As business is launching fintechs and all the
a market place, we players in the payment
treasurers are struggling and treasury eco-system
to find a single, global need to find the right
payment gateway partnerships in order to
provider. build a safe and extensive
offering to corporates.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 4
Introduction
The digital payment revolution is rooted in the 2008 global financial crisis. Growth in digital payments has
been phenomenal. Global payments revenues have nearly doubled in the last ten years to almost $2 trillion.
Unsurprisingly, the Asia-Pacific region, due to its market size and mass adoption of new technologies,
represents nearly half of worldwide payments revenues. By comparison, the EMEA region “only” represents
€0.4 trillion.
Global payments revenue ($ trillion)
2.0 EMEA Latin America North America Asia-Pacific
1.8
1.6
Payment revenues ($ trillion)
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2006 2008 2010 2012 2014 2016 2018 2019
Source: McKinsey Global Payments Map
In January 2020, we released our consumer survey titled The Future of Payments (Part I, Part II, and
Part III). Today, we release the results of our proprietary survey of more than two hundred executives (CFOs,
treasurers) across Europe, and release our forecast of trends in cash management, digitalisation, mobile
payments, cryptocurrencies, and blockchain.
In this paper, we focus on European B2B companies and their payment needs. The satisfaction of current
CFOs and treasurers is at a low of 50%, and B2B innovations and implementations are lagging the B2C
efforts. We explore avenues to better use technology to reduce the complexity of B2B payments.
This paper will examine the past, present and future of the payments industry. The implications for
customers and businesses are important, and the potential macro and geopolitical consequences are
profound.
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1. The Technology Agenda of
CFOs and Treasurers
Technologies are available to help overcome the top challenges and inefficient processes faced by treasury
departments regarding B2B payments.
In our survey, CFOs and treasurers reported the following top challenges:
−− Protecting against fraud/security exposure related to payment activity. Globally, business email
scams have resulted in losses of over $12.5 billion since 2013.1 Global losses from all kinds of payment
frauds have tripled to $32.39 billion in 2020 from $9.84 billion in 2011.2 For example, EssilorLuxottica
discovered a EUR 190 million fraud last year at its Thai plant.
−− Reducing time spent on errors in current manual payments. In the UK on average, executives are
misdirecting payments worth £3 million each year and a staggering £40 billion is paid late. Regarding
cross-border B2B payments, 60% require some kind of manual intervention, each taking at least fifteen
to twenty minutes.3
−− Managing bank KYC/documentation or other compliance issues. Automation of KYC processes
using artificial intelligence reduced over “6000 manual resources” (full-time positions) in a single
organisation.4
−− Obtaining timely access to all transactions occurring globally. Almost 54% of treasurers believe
that one of the pressing issues in cross-border payments is to trace payments in the case of problems.5
−− Keeping up with technology changes. According to Google, just during this pandemic, the number of
phishing sites registered was 2.02 million (20% more than in full-year 2019).6
−− Transitioning out of legacy payment solutions. Of the treasurers we surveyed, 51% encountered
cheque forgery in 2018 with an actual loss rate of about 18%.6
Top challenges treasury departments currently face about B2B payments
59%
60%
53%
48%
50%
40%
34%
30%
20%
18%
20%
10%
0%
Protecting against Manual payment Bank KYC/ Obtaining timely Keeping up with Legacy payment
fraud/security generation documentation or visibility to all industry changes to formats and
exposures related to workflows are error- other compliance transactions formats or channels create
payment activity prone and time issues occuring globally technologies used in inefficiencies as
consuming the payments payments are
process processed
Source: dbDIG Primary Research, Deutsche Bank
1 FBI Report: Global Business Email Compromise Losses Exceeded US$12 Billion in 2018
2 Global Payment Fraud Statistics, Trends & Forecasts (Source: www.merchantsavvy.co.uk)
3 Sir Jon Cunliffe, Cross-border payment systems have been neglected for too long
4 The true cost of KYC and how Authenteq lowers it (Source: www.authenteq.com)
5 The future of payments: a corporate treasury perspective, B2B Payments and Fintech Guide 2019; The complexity of B2B payments is holding back large
organisations; Untapped Editorial Team, Solving the Problem of Late Payments: Automated Invoice Processing Is the Solution (Source: www.swift.com)
6 Simon Chandler, Google Registers Record Two Million Phishing Websites In 2020
Deutsche Bank Research / The Future of Payments: Series 2. Part
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and Doing 6
The CFOs and treasurers we surveyed reported potential efficiency gains in the following sectors:
−− Cashflow forecasting. While doing manual cashflow forecasting, firms generally make mistakes on
small expenses, which ultimately adds up to large amounts, thereby rendering forecasts inaccurate.7
−− Bank account management. Decentralised bank account management typically leads to uncontrolled
inflation in the number of bank accounts, and powers that harm the overall control of treasury
operations. Further, poor bank account management can open the door for fraudsters to open unofficial
bank accounts. Meanwhile, bank guarantees also pose substantial financial risks as at times local
management of big firms can request for local bank guarantees without proper central authorisation.8
−− Invoice processing. Approving invoices and preparing payments manually can cost between $12
and $17 each.9 Businesses spend on average thirty-nine hours per week chasing invoice exceptions,
discrepancies, and errors. Traditionally invoice processing has been an internal function but now
organisations are moving it to a managed service by outsourcing or are automating it in house to reduce
human error.
−− Payment receipts/reconciliation. Sometimes, manual processing of transactions may trigger errors
(e.g. are forgotten). Consequently, it will never be added to the ledger. Such omissions can be difficult
to detect. Also, manual reconciliation is prone to accidental errors, such as a debit being charged as a
credit.10
−− Purchase order processing. Treasurers waste 6,500 hours per year, on average, on inefficient
payment practices (e.g. chasing purchase order numbers, processing paper invoices, and responding
to supplier inquiries). These inefficiencies11 cause "friction" in treasury/payment processes and supply
chains.12
−− Spend management analysis. Manual processing of expenses and/or vendor invoices is especially
prone to human error. Paper receipts can easily get lost, and there could be a data entry error due to
manual intervention. Among treasurers we surveyed, 81% admit to blindspots when it comes to tracking
company travel, expenses, and invoices.13 Many businesses use vendors or fintech software but face
challenges in terms of nexting ERP systems. Implementation is costly for SMEs ranging from $10,000 to
$ 500,000.14
−− Payment initiation. Processing payments is time consuming and labour intensive. Invoices need to
be received and entered into the system, then coded appropriately, then submitted for budget-holder
approval, and finally entered into the ERP system for approval. Credit card details are a frequent focus
of data breaches and a key risk for companies. Last year, British Airways was fined £183 million under
the General Data Protection Regulation (GDPR) for a security incident exposing card numbers, expiry
dates and Card Verification Value (CVV) codes.15
−− Fraud/security management. Improper attention to fraud and security needs can lead to reputational
and solvency issues.
7 Hilton-Baird, 9 reasons why your cash flow forecast is never accurate
8 Damien Chaminade, CFE, Poor bank account management yields fraud
9 Tim Wheatcroft, Why the Manual Invoice Processing Model Is Broken (And How to Fix It)
10 Jan Cahill, 5 Common Account Reconciliation Problems and How To Avoid Them
11 Increase in SCF programs have proved a solution to streamline P2P
12 John Simpson, Inefficient Purchase-to-Pay Processes Cost Businesses 6,500 Man-Hours Annually
13 Jillian Graff, What's Your Spend Management Costing You?
14 Chandler Hutchison, How Much Does an ERP implementation cost?
15 Leon Muis, Making the Case for Payment Initiation Services
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 7
Inefficient components of companies' financial operations
50%
46%
40%
33%
30%
25%
22%
20%
14%
12%
11%
10% 8% 7%
5%
0%
Cash Flow Bank account Invoice Payment Purchase Spend Payment Fraud/security Accounting Vendor
Forecasting management Processing Receipt/ order (PO) management initiation management sourcing
Reconciliation processing analysis
Source: dbDIG Primary Research, Deutsche Bank
CFOs identify four discernible trends in the transformation of business models:
1. Traditional B2B businesses entering B2C and a growing interest in e-commerce. E-commerce
rose by 50% in Europe since March and we expect sustained online volume growth of more than 50%
globally in 2021 and 2022. This will trigger needs for cutting edge collections solutions.
2. A move toward real-time treasury. Covid-19 has accelerated the delivery of bottom-up cash info to
senior management, making real time the relevant factor. CFOs are willing to monitor real-time account
balances and receive frequent notifications. They believe instant payments, application programming
interfaces (APIs), and open banking will be the technologies and services with the biggest impact on
B2B payments over the next two or three years.
3. Usage of cash applications. Automated accounting and reconciliations systems, and e-invoicing
technologies are expected to increase. This is the opening to fintechs on top of banks’ solutions in the
PSD2 context. PSD3 to also come.
4. Centralisation of cash management. Centralisation spans from cash position visibility to cash
concentration, at domestic/country level and at central/head office level. Centralisation of cash
management goes with centralisation and alignment of processes, tools, and bank account openings.
Treasurers are willing to rationalise bank accounts; between 20% and 50% of treasurers intend to
implement virtual accounts this year.
These four trends are reflected in the following figure. We surveyed European CFOs and treasurers and
asked them which technologies and services they think will have the biggest impact on B2B payments over
the next two or three years. Their ranking of technologies clearly aligns with their short-term priorities and
their readiness for implementation.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 8
Which of the following technologies/ services do you think will have the biggest impact on B2B
payments over the next 2-3 years?
40%
33%
Which of the following technologies/ services do you think will have the biggest impact on B2B payments
over the next 2-3 years?
30% 29%
35%
33%
30% 29%
20%
25% 19% 19%
18% 17%
20% 19% 19%
18% 17%
13%
15% 13%
11%
11% 10%
10% 10%
10%
5%
0%
Instant payments Application Robotic process Open banking Mobile Banking Artificial Blockchain/DLT ISO20022 Request to pay
0% Programming automation Applications Intelligence
Instant payments Application
Interface (APIs)
Robotic process
(RPA)/Bots
Open banking Mobile Banking Artificial
(AI)/Machine
Blockchain/DLT ISO20022 Request to pay
Programming automation Applications Intelligence
Learning
Interface (APIs) (RPA)/Bots (AI)/Machine
Learning
Source: dbDIG Primary Research, Deutsche Bank.
Source: dbDIG Primary Research, Deutsche Bank
Timelineof
Timeline ofvarious
various technological
technological advancements
advancementsused
usedininpayments
payments
RPA/Bots
AI/ Machine Mobile banking Request to pay
Instant Payments Learning application (Europe)
1973 2006 2011 2020
2000 2009 2015
web APIs ISO20022 Open banking
Block chain
Source: Deutsche Bank, Wikipedia, various websites
Source: Deutsche Bank, Wikipedia, various websites
Next, we will look more closely at each of the trends outlined above.
Next, we will look more closely at each of the trends outlined above.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 9
Trend 1: Traditional B2B businesses are moving into the B2C market and there is a
growing interest in e-commerce.
E-commerce has risen by 50% in Europe since March and we expect sustained online volume growth of
more than 50% globally in 2021 and 2022. This will trigger the need for cutting edge collections solutions.
Even though business-to-business platforms have been around for two decades, online marketplaces have
not yet made significant inroads to procurement departments. Concerns about scale, quality, reliability,
rerouting and refunds have made leaders hesitant to change their longstanding reliance on dealing directly
with suppliers.
There are four types of marketplaces:
−− Product-focused marketplaces (e.g. Amazon Business and Alibaba): These focus on commodities, such
as office surplus, but they can include maintenance, repair, and operation (MRO) providers.
−− Time-and-materials marketplaces (e.g. SAP Fieldglass and Concur): These focus on freight services,
travel services, IT and technology, temporary labour, and facilities management.
−− Scope-of-work marketplaces (e.g. Globality and Field Engineer): These focus on marketing, telecoms,
utilities, rent and real estate, insurance, and professional services (legal and consulting).
−− Corporate-spinoff marketplaces (e.g. InnoCentive and Eli Lilly): These are captive platforms that large
companies develop for their own supply networks.
1.1 The rise of e-commerce
Among all B2B businesses, a third plan to sell online and another third are working on “some”
implementation. Only 1% have not started to work on any e-commerce solution. The rise of
e-commerce will continue to be fueled by traditional B2B business looking to disintermediate
their wholesalers and to reach end consumers and customers directly. Selling directly to consumers
accentuates the need for reconciliation and collection technologies that can handle large volumes of small
payments (rather than larger B2B payments).
A notable phenomenon of the Covid-19 pandemic was the accelerated digitalisation of commerce, which
implies future growth in the merchant payments market. That market appears to be large. For example,
approximately 80% of small European retail businesses did not have any online shopping capabilities, and
some did not even have a basic informative website.
According to our proprietary analysis in Western Europe (France, Spain, Italy, and Germany), consumers
spent on average between 30% and 60% more on online retail at year-end 2020 compared to March. The
biggest e-commerce sales are in the United Kingdom, with 42% of the population buying online, and in the
US, where e-commerce rose to 36% in December.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 10
Average percentage of spending being done online
45
40
Average % of spending being done online
35
30
25
20
15
10
5
0 Mar-20 Mar-20 Mar-20 Mar-20 Mar-20 Mar-20
Apr-20
May-20 Apr-20
May-20 Apr-20
May-20 Apr-20
May-20 Apr-20
May-20 Apr-20
May-20
Jun-20
Jul-20 Jun-20
Jul-20 Jun-20
Jul-20 Jun-20
Jul-20 Jun-20
Jul-20 Jun-20
Jul-20
Aug-20
Sep-20 Aug-20
Sep-20 Aug-20
Sep-20 Aug-20
Sep-20 Aug-20
Sep-20 Aug-20
Sep-20
Oct-20
Nov-20 Oct-20
Nov-20 Oct-20
Nov-20 Oct-20
Nov-20 Oct-20
Nov-20 Oct-20
Nov-20
Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20
France Germany Italy Spain United Kingdom USA
Spend online at date of survey Intended spend online post-Coronavius Avg spend online pre-Coronavirus
Source: dbDIG Primary Research, Deutsche Bank
1.2 Data is the new gold: monetising data in a free payment world
In order to reach end customers, CFOs and treasurers have had to adjust and introduce new collection
solutions, either payment solutions that are typically B2C, or ones among those that have emerged with
evolving regulation incl PSD2 in Europe.
Most brands, retailers, and companies that sell directly to consumers have developed a mobile app, for a
variety of reasons related to consumer engagement. 81% of the mobile device users generally search for
the product or a service online while 26% of them search for the apps related to those specific products.16
These mobile apps can include a loyalty card or a prepaid card that users can load with funds for spending
at a physical store or online. This approach is popular with chain restaurants and coffee shops because
users are confident that they will spend $15 to $25 each month. Businesses can also push in-app offers and
promotions to maintain customers engaged, like flash sales for airline tickets or allowing users for extra air
miles when they buy tickets through the airline specific app.
With all these new apps, data is easy to get but hard to analyse and monetise. Most CFOs and treasurers,
rather, dream of having a large, solid partner who offers an easy-to-use plug-in data analytics solution.
However, onboarding a fintech/start-up player is difficult and the relationship is not well balanced (with a
lot to lose from the corporate side). Among corporations, 47% are struggling to analyse data and hope that
fintech will offer new functionalities, and 38% believe that API development is crucial.
In the new direct-to-consumer era, data becomes part of the service and competitive advantage. Some
companies have avidly used apps to track personal data (age, gender, address, weight, height, etc.) to
provide better and more personalised advice. Some insurance corporations have directly partnered with
credit card providers to provide enhanced insurance services in innovative ways.
Chinese citizens have particularly realised the importance of in-app payments. Of the Chinese people
surveyed, 42% said that e-wallets are just a fad and that in-app payments will be more widely used in the
future.
16 Ishan Gupta, 7 Reasons Why Your Business Needs a Mobile App
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 11
Companies that build apps or websites can take advantage of payment APIs from banks and vendors so
that they can offer more options to consumers and seamlessly integrate apps with the means of payment.
Some of these products, such as Appsflyer or Braze, can track user behaviour on a mobile device and offer
targeted advertisements and discounts. Rewards and discounts can be managed through mobile apps, or
through scannable mobile coupons, or via automated cash-back options.
Larger brands that have a strategic interest in selling direct to consumers must offer direct payments, to
avoid relying on third parties. Mobile apps such as Apple Pay and Google Pay collect fees while gathering
and analysing customer data. For this reason, companies often insource payment systems in a company
app. Uber, Lyft, Starbucks, Tesco, and Walmart have made sure to safeguard customer relationships by
offering loyalty programs, rewards, invitations, special discounts, and other benefits. As a result, we expect
payment fees to soon approach zero—even as companies collect a record amount of data. Because data
reveals customer patterns, it has become the new gold.
Factors explaining the importance of data and causing a pivot towards digitisation
Protecting against fraud/security exposures related to
payment activity
Timely approval of invoices/ payment details internally to
meet standard payment terms
Managing/ updating vendor bank account details in an
efficient and organised manner
Bank/KYC documentation or other compliance issues causes
significant delays/ confusion
Timely approval of invoices/ payment details internally to
achieve early-pay discounts
Legacy or siloed payment processes result in excessive delays
or manual workflows
0% 10% 20% 30% 40% 50% 60% 70%
Source: dbDIG Primary Research, Deutsche Bank
1.3 Mobile banking applications: coming soon
A fifth of CFOs and treasurers believe that mobile banking applications will have the biggest
impact on B2B payments over the next two or three years.
However, only 7% and 9% of CFOs and treasurers (respectively) make and receive payments via
a digital wallet. Overall, this represents 1% of current payments. That said, only a tenth think that
digital wallets are just a fad; most CFOs and treasurers are convinced that usage of digital wallets
will take off in the coming quarters.
Considering the existing technological and security capacities, mobile banking/electronic banking can
take off without many new features. Some improvements are needed: two-fifths of executives believe that
security and information reporting need to be improved and another third think that payment execution,
transaction approvals, and alerts and notifications could be improved.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 12
Features of B2B mobile applications/electronic banking in need of improvement
50%
41%
40% 37%
34% 34%
31%
30% 27%
20%
10%
0%
Security features Information Payment execution Transaction Alerts & User interface
reporting approvals notifications
Source: dbDIG Primary Research, Deutsche Bank
Trend 2: the move toward real-time treasury
CFOs and treasurers are willing to monitor real-time account balances and receive frequent notifications.
Amid Covid-19, top management need to be updated on their cash position 24/7 during the peak of the
crisis, real time has become even more critical. They consider instant payments, application programming
interfaces (APIs), and open banking the technologies and services with the biggest impact on B2B
payments over the next two or three years.
2.1 Instant payments:17 the beginning of a promising long road
Instant payment technology can profoundly transform B2B treasury operations. This technology allows
businesses to:
−− Reduce working capital requirements, thereby freeing up cash for more beneficial deployment;
−− Increase transparency on cash flows, which will help business to better tailor inventory volumes;
−− Reduce counterparty credit risk significantly, thereby decreasing the need for risk profiling before
onboarding new customers;
−− Reduce complexity associated with traditional payment venues, such as cheques, cash, and letters of
credit.
CFOs and treasurers surveyed think that instant payments will have the biggest impact, compared
to other B2B payment technologies and services. This is especially true in Spain, Germany, Italy,
and Benelux, where more than 40% of surveyed executives believe this. The UK is an exception
because instant payments—known as the Faster Payments Service (FPS)—have been available since
2008. It is not surprising that few British CFOs and treasurers surveyed expect the technology to have a
large impact over the next two or three years. Similarly, many countries are now adopting faster payments
systems, which enable nearly instantaneous domestic electronic payments. The benefits of such an
interface include: reducing the use of physical cash, which is labour intensive and subject to theft; and
enabling faster circulation of cash, which supports domestic economic growth, particularly where working
capital is scarce, such as SMEs. Hong Kong and Singapore have also developed such payment systems.
17 Instant payment is a method of exchanging money and processing payments, allowing for almost immediate transfer of money between bank accounts, instead of
the more typical one to three business days.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 13
CFOsbelieve
CFOs believeinstant
instant payments
payments is the
is the technology
technology thatthat
will will
havehave the biggest
the biggest impact
impact on payments
on B2B B2B payments
overthe
over thenext
next2-3
2-3 years
years
60%
53%
60%
50% 46%
50% 43% 42%
40%
40%
30%
25%
30%
21%
20% 17%
20%
10%
10%
0%
0% Spain Germany Italy BeNeLux France Portugal UKI
Spain Germany Italy BeNeLux France Portugal UKI
Source: dbDIG Primary Research, Deutsche Bank
Source: dbDIG Primary Research, Deutsche Bank.
In the Eurozone, instant payments started to be used in 2017 and they should become mainstream
Inby
thethe end of 2021.
Eurozone, instantA third
payments started to be
of executives used in
surveyed 2017 that
believe and they should
instant become
payment mainstream
technology will by
have the
the end ofimpact
biggest 2021.on
A third
B2B of executives
payments surveyed
over the believe
next two or that
threeinstant payment
years. Instant technology
payment will have
services the taking
are also
biggest
off impact on
in major B2B such
economies, paymentsas inover the next
Australia, two or
Japan, three
and years.
the US; Instant
thus, payment
we can instant are
expectservices also to
payments
taking
become off in
themajor economies,
norm for domestic such
B2Basandin retail
Australia, Japan, and
payments withinthe
twoUS; thus, we can expect instant
years.
payments to become the norm for domestic B2B and retail payments within two years.
Timelineofofinstant
Timeline instant payments
payments introduced
introduced in various
in various countries
countries
Europe (20 countries)-
SEPA Credit Transfer
Instant payments
China-IBPS
(Internet Banking Norway- Hong Kong-FPS
Japan-Zengin Korea-HOFINET Payment System) Straksbetalinger Singapore-FAST (Faster Payment System)
1973 2001 2010 2012 2014 2018
1987 2008 2016 2013 2017
Switzerland-Swiss United Kingdom-UK India-UPI Turkey-RPS US-Real-Time
Interbank Clearing Faster Payments Payments
Iceland- India-IMPS Sweden-BIR Denmark-
Greidsluvietan Straksclearingen
Source: Deutsche Bank, various websites
Source, Deutsche Bank, various websites
Instant cross-border payments for businesses are also on track to become mainstream in the
medium
Instant term. Onepayments
cross-border of the biggest developments
for businesses are alsofor that will
on track occur as
to become major market
mainstream in theinfrastructures
medium
adopt a common messaging approach, called ISO 20022. Major markets include
term. One of the biggest developments for that will occur as major market infrastructurestheadopt
Eurosystem,
a the
Bank of England,
common messagingthe Clearing called
approach, HouseISO
and20022.
FederalMajor
Reserve in theinclude
markets US, Payments Canada, Japan,
the Eurosystem, Singapore,
the Bank of
Hong Kong, and Australia.
England, the Clearing House and Federal Reserve in the US, Payments Canada, Japan, Singapore, Hong
Kong, and Australia.
Deutsche
Deutsche Bank
Bank Research
Research / The
/ The Future
Future ofof Payments:
Payments Series2.2.Post
Season PartCovid-19:
I. Post Covid-19: What Executives
What Executives Are Secretly Thinkingand
Are Thinking andDoing
Doing 1414
Europe is leading the way. The Eurosystem has set a date of November 2021 to migrate its RTGS system,
TARGET2. This will simplify compliance requirements and will lead to faster and more efficient cross-
border payments for businesses. SWIFT has also announced the migration of cross-border payments to
ISO 20022 over a four-year period, beginning in November 2021. A standardised global approach will lower
the implementation cost for the industry as a whole and, in turn, help even small businesses adopt these
payment systems.
2.2 APIs: crucial for treasurers
Slightly less than a third of CFOs and treasurers believe that the biggest impact on B2B payments will come
from Application Programming Interfaces (APIs). APIs are a computing interface that define interactions
between multiple software intermediaries and their developments can help to overcome the following
challenges and inefficiencies.
−− Optimising payments by reducing working capital requirements. Globally, companies could
release more than $1 trillion18 from balance sheets by optimally managing their working capital. APIs
can play a role in optimising at least three functions.
−− Receivables: tracking and prioritising customers that pay on time while automating processes for
invoicing and collections, thereby reducing disputes
−− Payables: reducing duplicate payments, rationalising supplier payment terms, and ensuring
contract compliance by flagging payments as they reach their due dates
−− Inventory: increasing on-time orders with more thorough sales planning by using AI-based demand
forecasting techniques and order-backlog analysis
−− Managing cash sources. Identifying how available liquidity can be utilised more beneficially, such as
when a meaningful early payment discount is offered by a supplier
−− Increased adoption of APIs will help to develop more robust Artificial Intelligence programmes.
Utilising business insights to better understand short-term cash-flow issues and long-term financial
health. AI based API can be used to analyse customers’ behaviour, which can help predict payment
delays and optimise cash recovery. For example, the Google Prediction API provides access to cloud-
based machine learning capabilities, including natural language processing, recommendation engine,
pattern recognition, and prediction. Developers can use this API to build AI enabled applications
capable of performing sentiment analysis, spam detection, document classification, purchase
prediction, and more.
APIs can also include services such as logistics, customs, regulatory and tax filing; therefore, they potentially
provide a one-stop shop for purchasing decisions, payments, trade finance, and business services. CFOs
and treasurers believe that development of APIs is crucial for instant information (47%), automation (46%),
reconciliation and system integration (41%), data analytics (38%), and payment execution (31%).
18 Trentmann and Minaya, CFOs Face a Tough Task: Freeing Cash Trapped on Their Balance Sheets
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 15
Which of the following areas do you think API development is crucial for?
50% 47% 46%
41%
40% 38%
31%
30% 25%
20% 17%
10%
0%
Instant Automation Reconciliation/ Data analytics Payment Push Account Shortening
information System execution Balance/ payment/
integration Transaction Collection cycles
Information
Source: dbDIG Primary Research, Deutsche Bank
Trend 3: usage of cash applications
Cash applications include automated accounting, reconciliation, and e-invoicing.
Digitisation of B2B payments offers a remarkable opportunity for optimisation. The transition of payments
from cheques (or cash) to wire transfers provides a far better tracking method. When trust is strong between
supplier and consumer, then a direct debit arrangement is even better.
Indeed, digitising payments is the first step toward automation. Billing software is already widespread, but
when combined with direct debit (or at least wire transfers), it allows companies to track and automate the
entire back office. The software can automatically process direct debits, track on-time (or late) payments,
automatically remind customers to pay, and confirm that payments were made.
Automation of back office payments processes has a triple advantage: it reduces costs; it reduces
complexity and coordination, which also lowers costs; and it saves time, thereby helping staff to focus on
managing working capital and investments.
Factors pushing businesses towards cash applications
60% 59%
50%
39% 37%
40%
34%
30% 27%
22%
20%
10%
0%
Protecting against Payment execution Information Obtaining timely User interface FX hedging
fraud/security reporting visibility to all
exposures related to transactions
payment activity occuring globally
Source: dbDIG Primary Research, Deutsche Bank
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 16
How government regulation is helping a pivot towards digital payments
Many governments globally are moving towards e-invoicing to track and ensure indirect taxes and customs
regulations, which in turn, is helping companies with reliable audits and payments. E-invoicing is also
making tax administration easier. In 2019, Italy became the first country in Europe to make e-invoicing
mandatory for all B2B and B2C transactions. Soon after, countries such as Cyprus and Croatia implemented
similar governmental projects. The harmonised environment for e- invoicing across the EU has also led to
increasing supplier competitiveness. Further regulatory changes, such as PSD2, have enabled challenger
banks like Fidor, N26, Revolut, and Starling to offer better digital services to business customers by
way of quick digital onboarding with user-friendly customer interfaces, online/in-app commercial cards,
and account management features. Various regulators have established “sandboxes” (isolated testing
environments) to develop new disruptive technologies. This approach cultivates the accelerated innovation
of cash and trade integration. Governments have also been active with initiatives that support the same
goals, such as Singapore’s Networked Trade Platform.
Trend 4: centralisation of cash management
The centralisation of cash management involves treasurers who are willing to centralise their cash positions,
which often goes with rationalising bank accounts. Between 20% and 50% of treasurers plan to implement
virtual accounts in 2021.
4.1 Virtual accounts: growing up to reality
Virtual accounts, sometimes called “shadow accounts,” are essentially non-physical accounts that can be
used by treasurers to rationalise and reduce the existing number of bank accounts. This benefits short-term
liquidity cash management as it results in consolidation and centralising corporate cash flows, diverting
the money that is flowing from previous bank accounts to fewer bank accounts. Furthermore, it creates
the opportunity to further centralise cash management activity such as account payable and receivable
processing. To some extent, it could also help to reduce external fraud, harmonise internal controls thereby
contributing to greater operational resilience.
Half of treasurers believe that virtual account technology is a game changer for payments.
Between 20% and 50% plan to implement virtual accounts. According to our survey, more
than two thirds of executives interviewed believe that virtual accounts would: better integrate
payments into financial systems and ERPs; enhance invoice level data with each transaction;
reduce fees for suppliers.
Within the next six months, are you going to implement virtual accounts for your treasury activity?
All
Spain
Portugal
Italy
France
UKI
BeNeLux
Germany
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes Don't know No
Source: dbDIG Primary Research, Deutsche Bank
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 17
Main factors that would encourage the use of virtual accounts
80%
72%
69% 67% 69% 69%
70%
60% 60%
60% 56%
50%
40%
30%
20%
10%
0%
Enhanced/invoice level data Payment integration into your Lower fees for your suppliers, Lower/nil surcharging by
with each transaction financial system/ERP encouraging them to accept suppliers
Receive payments Make payments
Source: dbDIG Primary Research, Deutsche Bank
Virtual account is a game changer
80% 80%
70%
60%
51%
50%
43%
40% 37% 38%
32% 33%
30%
20%
10%
0%
UKI Germany France Italy Spain BeNeLux Portugal
Source: dbDIG Primary Research, Deutsche Bank
4.2 Cryptocurrencies and blockchain: nothing on the horizon19
Treasurers are unlikely to adopt cryptocurrencies in the near future. In the next eighteen months,
only 5% are likely to use or receive cryptocurrencies and approximately 80% are unlikely to use
them. One of the main reasons cited for not adopting cryptocurrencies is the lack of regulation. However,
central banks are making progress. The European Commission, for example, published a proposal in
September and a public consultation is taking place now. In Q3 2021, the directive for markets in crypto
assets is expected to take effect.
19 Corporate Bank Research: Blockchain and Corporates - Transparency is the New Marketing (Source: www.research.db.com)
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 18
Only 2% of CFOs and treasurers surveyed use the blockchain technology. Only 1% is planning to
use it within six months, but 13% believe that the technology will have a big impact over the next
two or three years.
Most treasurers have a wait-and-see approach when it comes to the blockchain technology. CFOs and
treasurers are pragmatic people. They are currently focused on the longer-term impact of Covid-19 and
most only focus on two or three priorities. And only 1% see blockchain technology as a solution right
now. We expect motivation to use blockchain to remain flat or low during the next two or three years.
One potential reason for treasurers’ weak interest in blockchain could be that the technology is strongly
associated with cryptocurrencies, especially bitcoin, and because cryptocurrencies lack regulation.
However, many recognise that blockchain technology can provide quick payment processing while offering
transparent payment information, much like SWIFT gpi. Furthermore, blockchain trades can be programmed
so that payments are executed the moment goods arrive, thus enabling faster processes with fewer manual
steps, and helping businesses further optimise capital. Blockchain technology can also improve access and
transparency to cross-border trade funding, thereby helping banks better understand the risks. With that
knowledge, they can finance more trades. The transparency provided by blockchain will also protect banks
from fraudulent payments because banks will know exactly when all the requirements have been met to
clear payments. These are just a few benefits of blockchain technology, which is still in a nascent stage of
development. Blockchain could gain tremendous attention over the next five or ten years.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 19
2. Cash and Cheque: Two Species in
Extinction
The cheque has been around in one form or another since Roman times. Paper money was implemented in
Europe in the seventeenth century during a “price revolution” when large amounts of gold and silver entered
Europe (mostly brought by the Spanish from Latin America). With the influx of precious metals, banks
handed out payable receipts to the bearers of documented resources.
By the first half of the nineteenth century, many towns in the UK and the US had established local banks,
each issuing local banknotes. Before national currencies and efficient clearing houses emerged, banknotes
were only redeemable at face value by the issuing banks.
Paper currency, specifically the US dollar, only came to worldwide prominence after World War I. It has since
played a major role in shaping global history. Inadvertently, paper currency, especially large notes, has also
facilitated illegal transactions, underground economies, and money laundering.
Some business insist on paying with cheques because signing them gives the CFO/owner a sense of
control. First, CFOs know which funds are flowing out of the business, and the paper trail left by cheques
assists with record keeping. However, 43% of treasurers we surveyed still use cheques for different reasons.
Surprisingly, 40% say inertia—status quo—is the main reason, and 30% use cheques to pay a trade supplier.
Despite advancements in digital payments, nearly half of all global business transactions—$58 trillion in
2016—are still done on paper.20
There are good reasons to think cash and cheques will disappear in the medium term, at least for
corporate use. Both means of payment are losing momentum to dematerialised payments. During
the last six months, only a fifth of companies used cash, and only two-fifths used cheques.
B2B companies that use cash and cheque as methods of payments
80%
71% Cheques Cash
70%
59%
60% 56%
53%
50%
40%
32%
29% 29%
30%
22% 20% 21%
20%
20% 15%
10% 7% 7%
0%
Spain France UKI Portugal Germany BeNeLux Italy
Source: dbDIG Primary Research, Deutsche Bank
20 Oxford Economics, Euromonitor International, Kaiser Associates, McKinsey Payment Data, Mastercard
Deutsche Bank Research / The Future of Payments: Series 2. Part
Post I. Post Covid-19:
Covid-19: What What Executives
Executives Are Are Thinking
Secretly and
Thinking Doing
and Doing 20
All CFOs believe that cheques will disappear in the medium term. There are good reasons to stop
using them.
−− First, 60% of treasurers consider fraud as a top challenge. Indeed, in 2019, the annual value of cheque
fraud losses in the UK (e.g. counterfeit, forged, and fraudulently altered cheques) reached £53.6 million.
−− Second, 70% consider manual processes a top challenge.
−− Third, another 70% think that managing all the bank accounts is a top challenge.
−− Fourth and foremost, cheques increase the time required for cash collection.
Late payments, collection, and recovery are now major business problems. In fact, payment times have
increased by 10% over the last decade, and the average time for payments is now nearly seventy days. One
reason for this long average delay relates to business clients who deliberately extend payment terms to
maximise their working capital.
The primary cause for long delays is inefficient internal processes and methods for tracking receivables.
This factor is frequently overlooked and requires businesses to gather and manage all the data, including
that which is required to make timely payments and track deliveries. Other reasons include failed payments,
wasted admin time, the high risk of cashflow problems, awkward conversations with customers when
chasing payments, and potential data security issues.
Actual vs. preferred methods payment methods for financial transactions
81 72 Bank transfers (e.g. HVP, ACH)
11 11 Direct debit
1 5 Credit / debit cards
1 3 Cheque
2 3 Instant Payments
2 2
Online bill payment
1 1 Cash
1 1 Digital wallets (e.g. Paypal, Alipay, WeChat)
Actual Most Preferred
Source: dbDIG Primary Research, Deutsche Bank. Note: we looked at both for receivable and account payable and the picture looks similar.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 21
3. The Dematerialisation of Payments
The Covid-19 pandemic has hastened the decline of cash payments by about four or five years. In
the UK, the number of sellers using digital payments jumped in six months from 8% in February to 50% in
April 2020. By August 2020, the number of businesses with digital-only payment systems had stabilised at
about 33%. This shows a remarkable overall increase in the adoption rate of digital payments.
Share of cashless businesses
50%
40%
UK
30%
Australia
20%
Canada
US
10%
Japan
0%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
Source: Square
Dematerialisation is underway, with the widespread use of bank transfers, direct debits, instant payments,
and online bills.
This push toward a cashless society is further fueled by the following innovations: instant payments, API
integration, artificial intelligence, and automation. Cut-off times will vanish as operations are carried out
twenty-four hours a day, every day of the year.
Deutsche Bank Research / The Future of Payments: Series 2. Part
Post I. Post Covid-19:
Covid-19: What What Executives
Executives Are Are Thinking
Secretly and
Thinking Doing
and Doing 22
‘Established’ digital payment methods
100% 98% 97%
100% 97% 96%
94% 93% 93%
89%
90% 85%
82%
79%
80% 76%
69% 68%
70% 67%
64% 63%
60%
50% 47%
43%
39%
40%
30% 32%
29%
30%
20%
10%
0%
UKI France BeNeLux Germany Spain Italy Portugal Other
Bank transfers (e.g. HVP, ACH ) Direct debit Credit / debit cards
Source: dbDIG Primary Research, Deutsche Bank
There is also a very clear move to real-time solutions. According to our survey, most companies have used
same-day ACH and SWIFT gpi. Most of the rest are planning to make this move within the next six months.
This shift is a response to the top-three challenges related to paying vendors: (i) timely approval of invoices
and payment details to meet standard payment terms; (ii) managing and updating vendor bank account
details in an efficient and organised manner; (iii) bank and KYC documentation or other compliance issues
that cause significant delays and confusion.
‘Emerging’ payments solutions
50%
44%
40%
34%
30% 29%
30%
21%
20%
20% 18% 18% 18%
14% 14% 13%
13%
11%
9% 9%
10% 7% 7%
0% 0% 0%
0%
UKI BeNeLux Spain Italy Portugal France Germany
Instant Payments Online bill payment Digital wallets (e.g. Paypal, Alipay, WeChat)
Source: dbDIG Primary Research, Deutsche Bank
Looking ahead, most payments will become digital. Bank transfers and instant payments will become the
norm while payments via cheque and cash will continue to decline.
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 23
In the next twelve months, which of the following payments methods do you plan to use more?
40%
29% 30%
30%
Medium term:
20% 17%
check & cash disappear
10%
10%
4%
2%
0%
Long-term:
all payments are
-10%
digital
-20%
-30%
-40% -36%
-50%
-51%
-60%
Cheque Cash Online bill Credit / debit Digital wallets Direct debit Instant Bank transfers
payment cards Payments
Source: dbDIG Primary Research, Deutsche Bank
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 24
Appendix
Selected data from dbDIG survey of over 200 corporates (further data available upon request).
Demographics of B2B companies that use the following methods of payments
NET: NET: Digital
NET: All Bank Net:
Physical ‘Established’ Credit Online wallets (e.g.
Non- transfers Direct ‘Emerging’ Instant Base
payments Cheques Cash digital / debit bill Paypal,
physical (e.g. HVP, debit payments Payments Sizes
Cash & payment cards payment Alipay,
channels ACH ) solutions
Cheques methods WeChat)
Overall Overall 49% 43% 21% 99% 98% 96% 76% 48% 38% 21% 21% 7% 204
Cash management 50% 44% 20% 100% 100% 94% 83% 44% 31% 17% 20% 4% 54
Type of role Other 53% 43% 25% 100% 100% 100% 88% 63% 53% 28% 28% 8% 40
Treasurer 48% 42% 21% 97% 95% 95% 70% 45% 35% 20% 18% 8% 106
UKI 59% 56% 22% 100% 100% 100% 97% 69% 63% 44% 34% 13% 32
Germany 50% 32% 29% 100% 100% 96% 68% 64% 39% 7% 21% 18% 28
France 61% 59% 20% 100% 100% 98% 85% 30% 15% 9% 11% 0% 46
Italy 7% 7% 7% 93% 93% 93% 43% 29% 36% 14% 14% 7% 14
Country
Spain 71% 71% 29% 94% 94% 94% 76% 82% 41% 18% 29% 18% 17
BeNeLux 27% 21% 15% 100% 100% 97% 79% 39% 33% 30% 9% 0% 33
Portugal 60% 53% 20% 93% 93% 93% 67% 47% 33% 13% 20% 0% 15
Other 42% 26% 26% 100% 89% 89% 63% 32% 58% 32% 37% 5% 19
Agriculture, forestry & fishing 60% 0% 60% 100% 100% 100% 80% 40% 60% 20% 40% 20% 5
Manufacturing 51% 22% 43% 100% 98% 98% 73% 43% 32% 17% 21% 3% 63
Construction 47% 20% 40% 100% 100% 100% 73% 67% 47% 20% 13% 13% 15
Mining 100% 0% 100% 50% 50% 50% 50% 50% 50% 0% 50% 0% 2
Wholesale & retail trade 39% 21% 36% 100% 96% 93% 75% 46% 43% 29% 11% 7% 28
Transportation & storage 56% 17% 44% 94% 94% 83% 67% 56% 33% 17% 22% 0% 18
Accommodation, food & hospitality services 43% 29% 29% 100% 100% 100% 100% 86% 57% 0% 43% 29% 7
Information & communication services 64% 27% 55% 100% 100% 100% 91% 64% 55% 36% 55% 18% 11
Sector
Financial & insurance services 60% 60% 50% 100% 100% 100% 90% 70% 50% 10% 50% 0% 10
Real estate 25% 0% 25% 100% 100% 100% 100% 50% 50% 25% 25% 0% 4
Professional/ scientific services 50% 0% 50% 100% 100% 100% 100% 100% 100% 100% 0% 0% 2
Administrative/ support services 50% 0% 50% 100% 100% 100% 100% 50% 50% 50% 50% 0% 2
Public administration & defence 50% 0% 50% 100% 100% 100% 100% 100% 100% 50% 50% 0% 2
Education, human health & social work 67% 22% 56% 100% 100% 100% 89% 78% 67% 33% 44% 22% 9
Oil, gas & energy 47% 29% 35% 100% 100% 100% 65% 41% 29% 6% 12% 12% 17
Other services or activities 57% 17% 52% 98% 98% 96% 83% 46% 46% 22% 24% 11% 46
Only operates internationally 38% 25% 25% 100% 100% 100% 88% 38% 13% 13% 0% 0% 8
Operates mainly internationally 46% 17% 42% 97% 95% 94% 68% 48% 40% 26% 25% 6% 65
Even split 51% 21% 45% 100% 99% 98% 78% 47% 37% 19% 20% 9% 94
Geographical
coverage
Mainly operates domestically 46% 19% 42% 100% 100% 96% 88% 54% 42% 19% 23% 0% 26
Only operates domestically 63% 38% 38% 100% 100% 100% 88% 50% 38% 13% 13% 25% 8
Don’t know 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 0% 0% 2
Deutsche Bank Research / The Future of Payments: Series 2. Part
Post I. Post Covid-19:
Covid-19: What What Executives
Executives Are Are Thinking
Secretly and
Thinking Doing
and Doing 25
Which of the following technologies/ services do you think will have the biggest impact on B2B
payments over the next 2-3 years?
UKI Germany France Italy Spain BeNeLux Portugal Other All
Instant payments 17% 46% 25% 43% 53% 42% 21% 25% 33%
Application Programming Interface (APIs) 28% 29% 41% 7% 7% 24% 36% 44% 29%
Robotic process automation (RPA)/Bots 24% 7% 7% 29% 27% 27% 21% 31% 19%
Open banking 24% 18% 18% 29% 13% 12% 21% 25% 19%
Mobile Banking Applications 17% 4% 23% 21% 13% 24% 21% 13% 18%
Artificial Intelligence (AI)/Machine Learning 17% 21% 27% 7% 13% 6% 7% 25% 17%
Blockchain/DLT 10% 11% 11% 7% 20% 21% 7% 19% 13%
ISO20022 14% 14% 14% 14% 0% 3% 14% 13% 11%
Request to pay 10% 21% 2% 7% 13% 15% 7% 0% 10%
None of these 14% 0% 9% 0% 13% 3% 7% 0% 6%
Base 29 28 44 14 15 33 14 16 193
Please select the top challenges your treasure department currently faces with regard to B2B
payments
UKI Germany France Italy Spain BeNeLux Portugal Other All
Protecting against fraud/security exposures
57% 46% 74% 64% 69% 36% 86% 50% 59%
related to payment activity
Manual payment generation workflows are
43% 32% 64% 64% 63% 52% 50% 63% 53%
error-prone and time consuming
Bank KYC/ documentation or other
40% 71% 48% 36% 50% 52% 36% 38% 48%
compliance issues
Obtaining timely visibility to all transactions
43% 36% 43% 43% 31% 15% 21% 38% 34%
occuring globally
Keeping up with industry changes to formats
or technologies used in the payments 10% 21% 19% 14% 31% 15% 29% 38% 20%
process
Legacy payment formats and channels
create inefficiencies as payments are 20% 21% 10% 7% 13% 27% 36% 13% 18%
processed
Other 3% 0% 2% 14% 0% 12% 0% 6% 5%
Base 30 28 42 14 16 33 14 16 193
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 26
Which, if any, of the following do you think are inefficient components of your company's financial
operations?
UKI Germany France Italy Spain BeNeLux Portugal Other All
Cash Flow Forecasting 48% 44% 48% 50% 40% 42% 38% 50% 46%
Bank account management 34% 22% 38% 36% 13% 39% 46% 31% 33%
Invoice Processing 34% 7% 19% 21% 20% 36% 38% 31% 25%
Payment Receipt/ Reconciliation 24% 7% 12% 29% 33% 18% 46% 44% 22%
Purchase order (PO) processing 14% 0% 19% 14% 7% 15% 31% 19% 14%
Spend management analysis 3% 19% 10% 14% 27% 3% 15% 19% 12%
Payment initiation 7% 11% 21% 7% 0% 0% 15% 19% 11%
Fraud/security management 10% 0% 2% 14% 20% 6% 23% 6% 8%
Accounting 3% 7% 5% 14% 0% 9% 0% 25% 7%
Vendor sourcing 3% 0% 5% 0% 7% 3% 0% 25% 5%
Unsure 21% 30% 14% 14% 13% 12% 0% 6% 15%
Base 29 27 42 14 15 33 13 16 189
From the list below, please select your most preferred bank access method?
UKI Germany France Italy Spain BeNeLux Portugal Other All
Single bank portal providing access to multiple
45% 0% 21% 14% 13% 33% 8% 19% 22%
services from one bank with single sign-on
Single bank portal providing multi-bank access 21% 26% 12% 43% 27% 21% 8% 25% 21%
Via SWIFT solution or other Allwork 10% 19% 30% 14% 20% 15% 38% 19% 21%
Third party aggregator or treasury workstation 10% 41% 14% 21% 13% 3% 38% 13% 17%
Host 2 Host connection 7% 7% 14% 7% 20% 12% 8% 13% 11%
Multiple portals for different services from one
3% 4% 7% 0% 7% 3% 0% 6% 4%
bank
API 0% 4% 0% 0% 0% 6% 0% 6% 2%
None of these 3% 0% 2% 0% 0% 6% 0% 0% 2%
Base 29 27 43 14 15 33 13 16 190
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 27
What are the main reasons you pay via cheque?
UKI Germany France Italy Spain BeNeLux Portugal Other All
Do not use checks as payment method 41% 56% 35% 54% 33% 73% 42% 69% 50%
Inertia - status quo 24% 22% 28% 31% 40% 15% 42% 6% 24%
To pay a trade supplier 21% 15% 23% 8% 13% 9% 8% 25% 16%
Paper cheques provide the business with the ability to control
3% 0% 14% 0% 7% 0% 0% 0% 4%
the payments made
Gives the owner a sense of control. Signing cheques personally
7% 7% 5% 0% 0% 0% 8% 0% 4%
means you know what funds are flowing out of the business
Paper trail left by the check allows to maintain record keeping 3% 0% 2% 0% 0% 3% 0% 6% 2%
There are no variable fees; cheaper (vs. cards) 0% 0% 5% 0% 7% 3% 0% 0% 2%
Added security for mailed payments 0% 0% 0% 8% 0% 0% 0% 0% 1%
Base 29 27 43 13 15 33 12 16 188
Deutsche Bank Research / The Future of Payments: Series 2. Part I. Post Covid-19: What Executives Are Thinking and Doing 28
The Future of Payments: Series 1
January 2020
Part I. Cash: the Dinosaur Will Survive...For Now
Part II. Moving to Digital Wallets and the Extinction of Plastic Cards
Part III. Digital Currencies: the Ultimate Hard Power Tool
We would like to thank Anthony Chaimowitz of dbDIG Primary Research and Apurv Chaudhari, CFA an employee of
Evalueserve Pvt Ltd, a third-party provider for their contributions to this report.
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