Prices have risen only marginally, as banks have taken advantage of higher transaction volumes rather than raise prices
Los Angeles, CA (PRWEB) April 22, 2014
Corporate treasury services have a buyer power score of 3.1 out of 5.0. Slow price growth has boosted buyer negotiating power during the past three years, a trend that is expected to continue during the three years to 2016. Many banks have limited price growth and used discounts to take advantage of a low-price, high-volume transaction strategy. According to IBISWorld analyst Kevin Culbert, this factor is occurring with the economic recovery, causing access to credit and business transactions to increase.
Although some trends have increased buyer power over the past three years, several factors have limited buyer negotiating power, continues Culbert. First, there are relatively few substitutes available to buyers, which more or less locks buyers into purchasing the services when needed. Similarly, corporate treasury services have a high degree of product specialization; most vendors tailor contracts specifically around an individual client's needs. Specialization always increases costs to the vendor, which raises prices for buyers.
Another factor that limits buyer negotiating power is the highly concentrated nature of the corporate treasury services market. Although more regional banks have started offering corporate treasury services, the top five vendors still dominate the market, accounting for more than 60.0% of available market share. Large banks have dominated the market due to the significant capital investments required to develop the necessary infrastructure and back-end systems. This factor is expected to diminish over the coming years as the technology becomes more ubiquitous, causing more demand to move beyond tier-one banks. The rise in competition over the next three years is expected to continue limiting price growth. Furthermore, low price volatility, which also increases buyer power, is expected to continue over the next three years. As such, buyers should not feel rushed into signing a contract to lock-in prices. For more information, visit IBISWorld’s Corporate Treasury Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of corporate treasury services. These services are typically offered by banks and include management of receivables and disbursements, cash and liquidity management, and funds transfer. Other services can include foreign currency exchange and investment management.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.