Do Chinese SME treasurers fear technological change?

Recent research suggests mobile banking has yet to fully convince treasury professionals operating in the SME sector, with technological and cost considerations looming large

As best practices in treasury management evolve over time, IT capability and agility have become decisive factors when clients are choosing transaction banking partners in China. While customized solutions are always appreciated by clients, standardized technology offerings such as mobile collection products help banks to grow their customer base more quickly.

“In recent years, with the popularity of online payment, people from all walks of life need banks to provide financial services that match their business needs,” says Zhiyong Zheng, deputy general manager of the corporate business department of Bank of Communications head office.

“At present, the domestic B2C (business to consumer) market has surpassed online product sales, and has continuously penetrated into various personal consumer service scenarios. The growth potential of the B2B (business to business) transaction field is something to watch closely,” says Zheng.

Nevertheless, research suggests many treasury departments remain uncertain about adopting technology solutions.  

Despite a wide usage in the retail market, mobile banking has yet to fully permeate into corporate and business transactions. According to the 2018 Treasury Review undertaken by Asset Benchmark Research, the effect of a mobile promotion still fails to convince treasury professionals. Only 49.6% of Chinese treasurers and CFOs indicated they are using or plan to use corporate mobile banking services within six months.

This reluctance is partly explained by a lack of technology resources, a situation exacerbated by expense considerations. For many treasury professionals employed by SMEs the outlay of resources to develop an internal treasury management system or purchase from external technology providers remains prohibitive. Hence, SME treasurers sometimes have to rely on software or mobile applications offered by their banking partners.

In a bid to raise market awareness about technological options as well as engage new SME customers, Shanghai Pudong Development Bank developed a free SME treasury management mobile banking application in 2017. The application offers comprehensive treasury management functions such as account balance inquiry and inventory management.

For large corporations the landscape is different, with treasury management systems often requiring a higher level of customization and complexity. This provides an opportunity for transaction banks with cutting-edge technology.

In 2018, China Merchants Bank offered a unified online tailor-made treasury management system (TMS) to COSCO Shipping, a Shanghai-based state-owned enterprise, to facilitate the merger of China Ocean Shipping Company and China Shipping Company. Now, over 50 billion yuan (US$74.4 billion) of assets from 679 subsidiaries of COSCO Shipping are being managed on the new TMS.

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