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Rating the Banks' Supply Chains |
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A new study ranking the money supply chains of the country’s largest financial institutions gives JPMorgan top marks for extending its services into such areas as purchasing cards and payment systems.
The report by Financial Insights, an IDC company, took at look at how seven of the largest financial institutions have extended their corporate treasury and cash management offerings to include new offerings. The study found that financial supply chain management is still an emerging area, and that there was a considerable variation in product offerings and even the way those offerings were defined by the various institutions.
Financial Insights considers JPMorgan to be currently in the lead, followed by American Express, and Bank of New York Mellon. Other institutions studied included Citi, Bank of America, Deutsche Bank and Wells Fargo.
Corporate purchasing cards, which are similar to credit cards, are often used by companies to allow employees to make high volume, low value purchases. They are increasingly being integrated into corporate ERP systems to eliminate paper work and automate workflow.
The more sophisticated bank offerings also offer technology for back-end auditing. Starbucks, for example, uses a reporting tool to monitor purchases on a daily basis, to block unauthorized purchase categories and to modify spending limits. Other companies, such as Monsanto, require employees to take computer-based training courses before being issued a purchasing card.
A key challenge facing the industry is a lack of inter-connected services among the institutions. The report found that a substantial amount has been invested in technology to overcome that lack of connectivity.
“Financial institutions will have to work together to connect their individual buyer-supplier networks into a single network-of-networks, similar to what is happening in the check image exchange market,” said the report’s author. Aaron McPherson.
“Financial institutions still have to agree on a remittance data standard and push their customers to use it in a coordinated fashion as the focus of competition will become comprehensive service, reliability, and quality, rather than proprietary buyer-supplier networks or connectivity standards.”
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