Today, more than ever, people value the ability to transact and carry out tasks from the comfort of their homes or on the move otherwise referred to as ‘anytime anywhere’ banking. Corporate banking is in the cusp of revolutionizing its identity with significant layers of digital transformation.
This blog reflects existing roadblocks of digital transformation in corporate banking, the focus areas and the limitless benefits associated.
Existing roadblocks in digital transformation for Corporate Banking
The pace of digital transformation in corporate banking is slower in comparison to retail banking. Many existing dilemmas reside within this segment which causes a hindrance towards effective digital transformation.
- Monitoring and management: Portfolios and positions in corporate banking need consistent monitoring and management, which might be challenging to do digitally. Corporate bank customers go beyond looking for banks that provide financial services; they often want partners to help them manage their businesses properly.
- More at Stake: The relationships in corporate banking require more commitment from the customer and bank, which can be challenging to achieve. Since the stakes are higher, the risks also increase their reluctance to foray into digital transformation in corporate banking.
- Complex to Implement: Retail processes are more straightforward and more linear to understand, making it easier to adopt digital transformation processes without a hassle. The services in retail banking are also very productized, making them easy to navigate. On the other hand, corporate banking might mean that a large corporation has many accounts across geographies, currencies, and banks, complicating it.
- Corporate banking is relationship-driven: As opposed to retail banking, corporate banking is developed by relationships that might have taken several years to build in some cases. Many of these relationships were from in-person meetings and interactions using paper documents. It has been challenging carrying over and using digital transformation in corporate banking for these relationships.
The four ways of digital transformation in corporate banking
While there are existing roadblocks in digital transformation, corporate banks can still manage to transform digitally which can yield them accelerate business growth. We have listed for ways
Predictive insights through Big data and Analytics for improving sales pipeline
Banks have access to a lot more information than other companies in other industries. They collect data through onboarding, account openings, and the several transactions carried out. Meaningful insights can be drawn out from such data for boosting sales and marketing effectiveness. For example, Big-data and analytics can play a significant role in personalizing customer engagements. This means, banks can recommend appropriate products suitable for a particular customer. Similarly, service improvements can be initiated using sentiment analytics.
Digitize commercial routines to improve front-office efficiency and effectiveness
In corporate banking, relationship managers usually spend lower than 30% of their time in client-facing activities. Banks have tried using many front-office initiatives to no avail; the introduction of digital transformation in corporate banking can help solve this problem better. Process digitization can give the relationship managers more free hand to have more time to interface with clients and even use some digital channels for further communication.
Many front-office software solutions allow these relationship managers to organize their activities and complete administrative tasks quicker. This way, they can meet up with colleagues and prepare themselves for client interactions based on their profiles.
Enhance connectivity with clients and cost-to-sere by using true multichannel banking
Corporate banking models only consider relationship managers as the only vital sales channel and often neglect multi-channel support. This goes back to the relationship-driven nature of corporate banking and the management method. Banks can use digital transformation in corporate banking to use multi-channel banking methods. Some others have started experimenting with more unique coverage models and multi-channel offers for corporate entities.
Digital technologies allow some customers to engage with the bank and perform some activities online, such as capturing information which could even be through mobile devices. Only the complex questions are routed to the relationship manager. These multi-channel methods also allow the banks to reduce their costs to serve customer segments that do not generate as much revenue and justify costs in the relationship manager model.
Automating processes from beginning to end through quick process digitization
End-to-end processes are formulated to reduce complexity and make a customer’s journey faster, smoother and stress-free. Digital transformation in corporate banking regarding the client onboarding process can reduce the time taken from about two weeks to less than 48 hours. Apart from faster processing of procedures, there is also a considerable decrease in error and cost reduction.
Many banks have employed automation and lean methodology processes such as continuous improvement and reducing waste to foster better end-to-end processes. This way, banks can implement digitization technologies through short stints compared to multi-year or multi-month projects, which take too long for results to show. By using digital transformation processes, you can start seeing significant results in weeks.
A Success Story
Build-out-the-bank program for Allica
Top focus points of digital transformation in Corporate Banking
While developing tools for digital transformation in corporate banking, consider these areas as it is one of the most important to customers:
- Risk management: Consider intuitive tools to help customers keep track of the constantly changing risks in credit, interest rates, operations, regulatory compliance, currency, and information security.
- Liquidity management: Develop methods by which customers can easily manage funds for financing, investment, and operations.
- Cash management: Look at easy-to-use solutions that make buying, lending, collections, letters of credit, payments, information reporting, investing, and foreign exchange easier.
- Data management: Develop tools that foster partnerships and collaboration with creditors, technology service providers, chief financial officer, investors, and banks.
Looking for digital transformation?
What can digitization offer to Corporate Banks?
- Competition Edge: New technologies will continuously develop, which will lead to an increase in specialized skills. Digitization isn’t a one-and-done process. It ensures you are ready for the next technology wave, and you can position yourself to cater to customers and offer new solutions. Allowing employees to develop these skills will sustain the bank’s growth and keep you ahead of competitors.
- Time to market: Digital transformation in corporate banking gives far less time for the banks to release products to the public. Because of the continuous integration and continuous deployment processes, banks can reduce their testing time and release products to their customers quicker.
- Customer Experience: Today, people are looking for services that make their lives easier more than ever. Digital methods focus on providing the best customer experience to stay competitive. Companies that focus on the customer’s journey increased speed and agility in insights, customer adoption of digital customers, and agility in transformations will be the authority.
- Process Simplification: Digital transformation methods have shortened the steps and processes for businesses to connect with their clients. Technology has made it easier for people to connect and banks leveraging that advantage for their digitization brings their workforce and whole architecture together.
- Cost Savings: From managing physical documents to scheduling and making it for in-person meetings, digital transformation in corporate banking considerably cuts down your costs.
How can Maveric help in digital transformation for Corporate Banking?
Maveric is a solution-led banking transformation provider for retail banking, corporate banking and wealth management. As an award winning transformation partner for many leading corporate banks, we can bring our contextual solutions, frameworks and proven accelerators to plan and execute your digital transformation goals. Our extensive banking domain coverage, contextual solutions, insights-led engagement and high velocity execution has enabled us to be a partner of choice for digital transformation.
Digital transformation is an unavoidable topic in corporate banking. Agility and flexibility of banks to respond faster to their customers will be the key to success. Furthermore, superior customer experience with insights led ecosystem will be the ultimate goal through exponential digital transformation.