The fifth annual Bottomline Business Payments Barometer pinpoints the beliefs, sentiments and expectations of financial professionals from across the payments industry. With research respondents including treasury professionals from 400 of the UKâ€™s largest corporates and enterprises, it delivers unique insights into the drivers of change in 2020 and ahead. Subjects covered this year include technological progress, regulatory and security pressure points, alongside contentious issues such as coping with market volatility and attitudes to fraud. Bottomline Technologiesâ€™ Ed Adshead-Grant, General Manager of Payments, shares his thoughts.
If you were to ask me what the purpose of the 2020 Bottomline Business Payments Barometer is, Iâ€™d say itâ€™s there primarily to help you compare the sophistication of your organisationâ€™s approach to payments with those from across the economy. Most particularly, with your professional counterparts in other large companies and enterprise businesses.
It also highlights, more powerfully than ever, technologyâ€™s increasingly fundamental role in the upper levels of the payments industry. After all, this yearâ€™s edition reflects attitudes held at a key moment in history â€“ immediately before the economic lockdown that has physically separated companies of every size from their customers, suppliers and staff. More than ever before, those businesses most capable of using secure technology to engage remotely and intelligently with customers and other important groups are therefore best placed to perform well in an uncertain future.
So, letâ€™s look in a little more depth at three key areas where technology has a fundamental role to play. Combating fraud. Smoothing the inevitable bumps in organisational performance caused by recent unprecedented changes to the trading environment. And regulatory change.
Leading the fight against fraud
Perhaps the most surprising finding was that well over half (62%) of treasury professionals regard financial fraud losses as â€˜part and parcel of running their businessâ€™, and therefore a cost they need to budget for. Thatâ€™s weighty when you consider the average cost of fraud for enterprises is Â£336,000.
I must admit that we hadnâ€™t seen this coming, particularly given the array of solutions now available to help businesses protect themselves. However, we were reassured when 74% of enterprise respondents agreed â€˜We should be doing more to mitigate against fraudâ€™, clearly suggesting that most finance professionals believe there is much more they can do to protect their organisations. That 54% of respondents from larger businesses agreed that there was little they could do to recover fraud losses shows that prevention is clearly the solution.
The good news is that, for the third year in a row, the number of respondents telling us that fraud has impacted their business over the last year has fallen. Overall, companies are putting prevention measures in place to help mitigate fraud. And itâ€™s the enterprise organisations that are leading the way, reporting a 25% drop in fraudulent case numbers.
It can be no coincidence that these large and sophisticated organisations are more likely than others to use automated payment-protection technologies such as automated employee behaviour monitoring (27% versus 19% across all other businesses) and bank account validation and verification (57% versus 48%). The figures suggest these solutions work â€“ and, in our view, all businesses should be investing in technology that helps identify potential fraud before a single penny leaves their accounts.
Once again, enterprise organisations have bucked the trend, with more than half already using instant or real-time payments (RTP) and adoption is set to increase by a further 4% next year. While this is encouraging, weâ€™re not over-optimistic. Although larger companies are more inclined to settle outstanding payments using RTP, they still remain the biggest culprits for late payments and therefore bear responsibility for the impact this has on smaller companies.
That said, large and enterprise companies are the most willing to embrace new payment initiatives, despite feeling increasingly weary of regulatory change. Set to further stimulate even more immediate settlement of debt is the new Request to Pay (RtP) initiative. Launched in May 2020, this is aimed at everyone in the UK, from large corporates to individuals. With proven benefits including reduced costs, improved cash flow and lower risk of fraud, RtP awareness stands at 72% among enterprise professionals, compared with 64% in all businesses.
The regulatory dilemma
The pandemic is fuelling concern across all areas of regulation, exacerbating the reasons why many companies donâ€™t see compliance as an urgent priority.
We believe this lack of urgency and delays to initiatives such as ISO 20022 and the New Payments Architecture (NPA) are causing a damaging sense of regulatory fatigue and a lack of resilience across the economy. I for one would like to see large corporates and enterprise organisations flex their treasury muscles to show the market the benefits of rapid compliance. Doing so would be a massive step forward in persuading companies everywhere to go digital, embrace Open Banking and automate.
Please click here to access the Bottomline 2020 Business Payments Barometer in full.