Europeans spent May 2018 dealing with email pleas from companies begging them to stay friends. Thanks to the General Data Protection Regulation (GDPR), over half a billion EU citizens now wield more power over who holds data on them and what companies can do with that valuable information.

At the same time, the second Payment Services Directive (PSD2) is making its presence felt. It aims to encourage competition by allowing non-bank players to access customer bank account information and to initiate payments.

People now expect more from their bank than they did even five years ago. As North Americans become ever more used to turning to the digital world for all aspects of their lives, the need for banks to make their online service offerings as good as their offline services, eg, mortgages and pension planning, seems obvious. These changing customer behaviours and demands should be fuelling change in the services and products retail banks offer their current clients. It should also be influencing their thinking in how they reach out to new clients.

Yet, as industries are disrupted and business models evolve, developing a targeted spend management strategy is vital to supporting CFOs’ efforts to achieve the business’s financial goals, including profitability. In our conversations with the CFOs of two major corporations— steel manufacturer Essar Steel and insurance firm Sun Life Financial—two themes emerged that seem to underpin these efforts: the role of digitalisation and open communication with internal and external stakeholders.

The need for a holistic view

The task is particularly timely at the present point in the economic cycle. Led by the US Federal Reserve, central banks are tightening monetary policy and increasing interest rates. As a result, companies will need to put idle cash to work and manage their debt levels accordingly. Payables and receivables, which make up over half of working capital figures on average, as well as cash conversion cycles, are bound to become top of mind for finance functions dealing with increasingly complex global supply chains.

Africa and the Middle East share many common features: young populations, high smartphone penetration rates, and problems with unequal access to banks and banking services, particularly in rural areas. These demographically young and fast-growing regions include hundreds of millions of consumers who are growing up with a deep attachment to their phones and the benefits that the internet has to offer. Historically, banks across the Middle East and Africa may have been slow to react to the demographic and technological changes around them, but this is no longer the case.

Regtech can help by automating what would otherwise be tactical and manual processes—such as data collection and reporting—and making these tasks more cost effective, efficient and strategic. Advances in areas like artificial intelligence (AI) and machine learning make it possible to automatically parse through regulatory filings, track employee compliance and more. Advanced regtech analytics solutions can also match and cleanse data from various legacy systems quickly and accurately.