By Andrew Bateman
Earlier this year, as the coronavirus spread rapidly around the world, corporations were faced with difficult decisions about the crisis. First and foremost, out of an abundance of caution and in order to ensure the safety of their workforce, organizations enforced work-from-home policies. This was a seemingly simple decision, but many businesses lacked the critical infrastructure, training, and preparedness to handle this total digital shift while thwarting the myriad cybersecurity and fraud vulnerabilities cropping up in the wake.
Even the many organizations that had an infrastructure in place for this wide-scale migration to remote and virtual work had to scale up their technology in order serve their workforces. This shift has been a primary catalyst for digital infrastructure investment and transformation across corporations globally.
In fact, 66 percent of respondents to FIS’ 2020 Corporate Liquidity Market Report said they are planning to increase investments in digital technology and infrastructure to meet the demand. The survey of 336 corporate treasurers, payments and receivables professionals across a variety of industries in every corner of the globe also found that COVID-19, economic uncertainty, and cybersecurity were the top three challenges corporations face in the near term. Two-thirds of those surveyed also indicated that the increase in fraud was also a challenge.
These three concerns are driving the rush of investment in corporate payments and treasury infrastructure; these findings also shape the lessons from 2020 that will carry us into a digital future.
Cybersecurity and Fraud Mitigation Requires a Streamlined Approach
Many corporations have met the moment by enabling wide-scale remote work for their workforce, but this has had some ramifications that could not be avoided. Namely, opening the networks to this level of virtual access has broadened the scope of cyberattack, with phishing events and other exploitation tactics on the rise globally. Additionally, fraud risk has risen with the lack of technology to manage remote, disparate and manual payments processes.
One way for organizations to beat back the tide of fraud and cyberthreats is to streamline systems that can centralize and standardize processes. For example, by digitalizing payments with a centralized hub, a treasury or shared services function can put controls and workflow around processes that protect against payments fraud while also reduce costs. Nearly three-quarters of respondents to FIS’ survey said they’ll be investing in payments infrastructure to revamp and digitalize their systems.
The added benefit of moving to digital technologies that help fight fraud and tighten security is that many organizations will likely see operational efficiencies and cost savings. Further, as vendors create solutions to address the technological challenges of tomorrow, they create a network effect with their managed services offerings.
COVID-19 and the certainty of uncertainty
The ongoing pandemic has created a new framework for a virtual workforce. While it was a necessary move to help slow the spread of COVID-19, the titanic shift has exposed key vulnerabilities in legacy corporate infrastructure and digital technology.
Seventy percent of respondents to FIS’ survey say that COVID-19 is having a significant impact on their adoption of digital technology. From advanced phishing attacks to the security liabilities of maintaining virtual access to sensitive information for employees working remotely, it’s hard to overstate how substantial the impact of working from home has been for organizations.
The future of a mostly remote workforce is a going to be a hot topic for debate in the years to come. The principle uncertainty that COVID-19 has brought must now be a factor in corporate planning, with organizations being more proactive in future-proofing their legacy processes. Investing in cloud computing and database management, as well as digitalizing payments systems not only will help mitigate for the unknown, these investments also represent the reevaluation of cost-basis. By reducing operational inefficiency and mitigating fraud, corporations are looking for cost savings across the board.
An Economic Gale Wind is Coming
Investing in new technology today will help keep the ship sailing in rough seas, however, the economic headwinds are also of prime concern. Executive leaders across the landscape appreciate this, and should be taking action to strengthen their treasury, payments and receivables technology to carry them to calmer waters.
Leveraging the power of cloud computing to help implement and access solutions remotely—and securely—is paramount for corporations to manage their finances through the chop. For example, treasury departments need highly secure and remote capabilities to manage cash flow, debts and investments, payments, risk assessment, and overall health monitoring. The respondents to FIS’ 2020 Corporate Liquidity Market Report found that security followed a close second to fraud as the most important reasons for adopting new tech.
Cloud migration isn’t just about secure access remotely, but it also provides more opportunities for corporations to integrate advanced managed services from partners, adding layers of value for clients and vendors. It’s through these services that corporations can find operational efficiency, especially in managing things like datasets.
Applying the Lessons
The core digital transformation taking shape out of a year full of uncertainty is centered around a few key themes. Firstly, migration to cloud-based solutions will continue to accelerate. While significant numbers of the workforce may eventually return to an in-office setting as the pandemic subsides, it’s clear that remote work will not drop back to pre-pandemic levels again.
Second, as corporations are focusing on consolidating technology to drive standardization across operations, the pandemic has proven an opportune moment to replace outdated systems. Investing now to reduce costs and streamlining processes at the same time is crucial in planning for the next unplannable event like the COVID-19 pandemic.
For example, if you’re an airline, you have an opportunity to refurbish your organization—while there are immediate challenges to face, planning for how you operate in the new world is vital to future success. Similarly, treasury departments and corporate payments often function are like a 40-year old plane. It still flies, but it takes longer and costs more to operate. A centralized, digital payments hub is the state-of-the-art jet plane with reduced fuel costs and increased speed.
As part of these upgrade investments, corporations are going to be looking to vendors and partners who have consolidated offerings that reach across functions and are backed by secure infrastructures. Standardization and operational efficiency will be business critical. Living through these uncertain times has been challenging emotionally, economically, and for leadership, but there is some comfort in the clear lessons emerging that will make us all better equipped for the unforeseen future.
Andrew Bateman is EVP, Group President, Capital Market Solutions – Buy-Side at FIS.
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