Home Slider Delivering a Modern Banking Experience to Corporates

Delivering a Modern Banking Experience to Corporates

by internationalbanker

By Tushar Chitra, Vice President of Product Strategy & Marketing, Oracle Financial Services


Digital acceleration has transformed how people live and work. Today, we expect our digital experiences with brands to have modern and intuitive user-interfaces, be seamless across devices and provide online communication options like chat. While many consumers have been seeing this digital evolution when interacting with their retail banks, it is also catching up fast in the corporate banking world. Expectations are shifting, and corporates are increasingly looking for these new standards when interacting with their banks.

The 2020 Global Treasurer’s Banking Transaction Survey revealed that while corporate clients’ satisfaction is on the rise—with 60.3 percent of corporate clients highly satisfied— more than half (53 percent) are reviewing relationships with their main banks, so this is something to pay attention to. Cost is the single greatest factor driving strategic relationship reviews, with more than 63% of respondents citing it as a focus area. Thirty-nine also said that integration of services into existing systems is important while digital customer experience/service is important to 36.4 percent.

Technology is key to responding to these all-changing requirements, consistently across the relationship lifecycle. To continue meeting customer requirements, banks need to adapt by embracing a digital transformation strategy that prioritizes key areas like payments, cash and liquidity management, and trade finance.

The ongoing economic downturn has also showed us the need for constant innovation and evolution in matters of technology. It has affected virtually all facets of our lives and the corporates are still recovering. Emerging technologies, agile competitors, supply chain disruptions, and a low interest rate environment are mounting further challenges on the banking and corporate sectors – but beneath these challenges, there are business opportunities where banks and corporates can work together.

What corporates are demanding

One of the top areas where corporate expectations are evolving is payments. In recent years, businesses have shifted from expecting payments to be executed the next day to being executed in real-time. For banks, this means they need APIs that allow corporate customers to manage and execute their payments. 

With the advent of payment standards like ISO 20022, corporates also expect fidelity of information. Banks must provide a payment system that supports global standards while also automatically optimizing and processing cross border transactions. ISO 20022 also means banks must be ready to process far larger volumes of data at a faster speed and factor in online fraud prevention, compliance checks and intraday liquidity management. 

The pure number of transactions corporates are doing in the digital world is increasing dramatically. However, each invoice and payment are due on different dates, creating cash flow challenges for customers. Corporate clients need instant, real-time information on their transactions and account activity. To help them manage working capital more effectively and efficiently, banks must provide corporates with real-time visibility into their global cash and liquidity position as a basic offering. Futuristic banks and corporates are looking at even future visibility with advanced AI capabilities enabling cash-flow predictability

Trade finance is another area being modernized at a rapid rate. Corporates are looking for the right kind of technology that will allow them to engage digitally with their customers in real-time, scale operations quickly and gain end-to-end visibility into customers’ trade finance transactions. In addition to providing this visibility, banks must capitalize on the opportunity to automate process workflows to enable smarter operations. Machine language and natural language processing has enabled banks to automate much of the processes bringing in faster turn arounds for the corporates. Banks are also increasingly adapting trade finance-as-a-service allowing for not only faster deployment times for themselves but also ensuring higher agility and scalability for their customers – the corporates

How can banks work together with corporates?

While the traditional need of maintaining an excellent relationship between bank and corporates remains, other requirements have become critical to servicing corporate customers. Efficiency, though an age-old metric, is still extremely significant. However, the contributing factors have changed as the banks and corporates constantly try to up their game against their competitors. Artificial Intelligence (AI), Machine Learning (ML), and Natural Language Processing (NLP) are major game changers in this category. This can start from something as basic as KYC automation, to more complex technologies such as chatbots and predictive analytics.

Connectivity with corporates and the speed of response are competitive differentiators for banks. The need of the hour is a well-structured digital backend with a robust set of APIs built on top of it through which all business-as-usual activities can happen.

Transparency between banks and corporates has been one of the major impacts of the current digital revolution. With a real-time view of all operations and products using customized dashboards, every customer has access to mission-critical data points and records. However, this is going to evolve further, enabling faster, automated decision-making.

Overcoming hurdles to make digital change

Corporate banking services are undeniably more complex than consumer services. While retail banking processes are linear— debits and credits—and services are productized, large corporates oftentimes have hundreds of accounts across multiple banks. Corporate banking processes from trade finance to cash and liquidity management are also much more complex. Positions and portfolios require constant monitoring and management.

When it comes to replacing legacy systems, large banks are often risk averse because they want to avoid any short-term negative impact on client service, since these customers represent such a large share of their profits. As a result, we are seeing corporate clients embrace componentized solutions that enable them to modernize with minimal risk, beginning where they want and proceeding at their own pace. This allows banks to map their own modernization journey and gain flexibility so they can tailor their offerings to a customer’s unique needs.

Digitization is creating new avenues for banks’ growth, improving customer service, and creating efficiencies in bank operations that can reduce operating costs. By steadily replacing outdated legacy systems, banks can improve their own workflows and transparency, allowing them to better serve their important corporate customers. Digitization also positions banks to more quickly roll out new products for their corporate clients, while driving new levels of efficiency and risk management.

Banks that fail to meet corporates evolving expectations, especially in the areas of payments, capital management and trade finance, risk losing their business. As banks look to the year ahead, they must refresh their digital roadmap, ensuring it accelerates change customers can see and benefit from and ensure alignment with their clients’ objectives and strategy.   

The Bottom Line

Banks have an opportunity to leapfrog in this game. But this can be achieved only when banks start digitization and automation of their global functions to serve their customers better in this connected real-time world. 

Each of these technologies is increasingly vital, whether a bank wants to improve an existing or new business process, innovate in one key area, or reduce data silos. As SaaS applications are becoming the status quo, differentiating a business by leveraging emerging technologies have opened up new pathways to meet rapidly changing customer, employee, and counterparty expectations. 

A technology-first approach is to embed AI, machine learning, digital assistants, and other emerging tech into the trade and supply chain finance application – leading to larger successes down the line – in short, a complete digital overhaul.


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