Treasury and finance professionals anticipate more operational challenges in 2019 than in previous years, according to a recent survey conducted by TD Bank at the 2018 Association for Financial Professionals Annual Conference in Chicago, Illinois. The risk of payments fraud/cybersecurity topped professionals’ list of concerns, with 44 percent naming it their top operational challenge, a 14 percent year-over-year increase.
The ability to adapt to or process faster/electronic payments is an obstacle for 37 percent of survey respondents, also rising 14 percent year-over-year. This concern is likely to cause some anxiety for finance professionals, as commercial payments continue evolving. In fact, the majority (60 percent) of respondents expect to see the largest amount of growth this year within faster or real-time processing, an 8 percent increase from last year.
Despite industry uncertainties, blockchain has benefits
Unsurprisingly, technology continues to influence treasury operations, and the majority of survey respondents (90 percent) feel that blockchain/distributed ledger technology will have some type of positive effect on the payments industry.
The top impact of blockchain/distributed ledger technology is its ability to create stronger audit trails (29 percent), respondents said. Additional positive outcomes include:
• Speeding up the payments process (22 percent);
• Improving efficiency of cross-border payments (21 percent); and
• Reducing payments fraud (18 percent).
“Blockchain technology has broad implications for the commercial payments space, from speeding up settlements to securing cross-border transactions,” said Rick Burke, head of corporate products and services at TD Bank. “Even though much of the industry has a baseline understanding that blockchain can evolve and improve payments, the varied responses indicate that the technology’s specific capabilities and implications are still a great unknown for many finance professionals.”
Despite the hype around new innovations like blockchain, finance professionals appear to be split on the use of another technology type to facilitate payments: open APIs. Fifty percent of respondents claim that their organization currently uses or is in the process of integrating open APIs into company operations, while 49 percent do not use open APIs and nearly a quarter of that group does not have plans to do so in the future.
With so much change on the horizon, companies are investing in training strategies for several facets of treasury operations. Survey respondents said their organization has training strategies specifically for data and analytics (45 percent), AI and automation (26 percent) and blockchain (14 percent).
Fraud casts a larger cloud
As the risk of payments fraud/cybersecurity threats is top of mind across the industry, there comes an expectation from 98 percent of respondents that financial institutions should assist organizations with protecting against fraud and cybercrime. More than half (55 percent) said financial institutions can help them better protect against fraud and cybercrime through education – although 48 percent of respondents admitted that their company does not have any in-house cyber fraud prevention training. Additionally, one-in-four finance professionals surveyed feel that banks should offer greater controls on transactions and 18 percent state they want risk or process reviews.
“As global fraud and cybersecurity incidents continue to rise, corporations recognize the need to bolster their protective measures and improve employee understanding of how to safeguard finances,” Mr. Burke said. “To achieve real success, organizations and their employees need to be better able to identify and deter fraud attempts. This should be a responsibility shared by businesses and their financial institutions, beginning with better education.”
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