The banking industry is unquestionably going digital. But it’s increasingly clear that this transformation is only the first step – not the last – in the evolution of financial services.
Over the past few years, retail banks have been making the transition from product-focused, brick-and-mortar entities to customer-centric, service-oriented digital enterprises. They’re getting better at delivering great customer experiences to consumers and digitalizing the customer interaction.
But thanks to banks’ success, even more needs to be done.
That seems ironic, doesn’t it? Now that customers of retail banks receive more personalized services focused on their desired outcomes, they know that banking can be simpler, more convenient, and connected with their other financial activities.
The retail banking expectations of today’s corporate banking customers should not be underestimated. As they interact with banks in their professional lives, these clients expect the same frictionless, connected banking experience they currently enjoy with banks, retailers, and social media platforms.
Some leading firms see the connection and are taking action. According to a recent American Banker article, HSBC plans to invest up to US$17 billion in technology by 2020 – in part to improve the digital experience for commercial clients. Corporate clients are requesting more digital services from their banks, says Edward Achner, head of digital banking for the U.S. commercial banking division at HSBC, thanks to their day-to-day consumer experiences with retail banking.
Yet most corporate banks aren’t ready to meet these demands. What’s missing?
Elements of intelligent banking
Digital banks can only succeed in the digital economy by efficiently connecting with customers, partners, and emerging ecosystems. By practicing intelligent banking, firms can meet this goal.
Financial services enterprises that embrace intelligent banking can become an integral part of corporate customers’ value chains. Intelligent banking includes four key elements:
- Seamless connections – Banks need to be able to support faster onboarding for corporate clients as well as fast, easy provisioning of innovative bank services. By using advanced customer analytics, they can deliver personalized offerings that make customers feel understood and valued. And artificial intelligence solutions can help ensure that clients get the best possible experience, regardless of channel.
- Data-driven intelligence – The foundation for banking intelligence is a financial data warehouse that can be used to gain insight from both bank data and industry-specific content. Firms need to deploy open data models and platforms that support the integration of third-party data and customer-specific solutions and content. Adopting a scalable platform sets the stage for banks to offer data as a service.
- Operational effectiveness – There is no room for inefficiency as banks become digitalized. Standardized technology can help reduce the total cost of ownership, while cloud solutions offer a wide range of cost and productivity benefits. By embedding machine learning and other innovative technologies in processes, banks can do more with less.
- Financial insight and risk control – Functionality such as a banking-specific chart of accounts, accounting tools that are compliant with global regulations, and multicurrency accounting offers protection and security.
The path forward
Developing a digital transformation road map that leads to intelligent banking can seem daunting. Fortunately, industry experts and solution providers are joining together to help corporate banks make the changes needed to thrive in the digital era.
I think there’ll be a lot of discussion on this topic at Sibos in Sydney this year. The focus will be the transformational digital journeys of banks and financial service providers. With the theme “Enabling the Digital Economy,” Sibos 2018 speakers plan to offer guidance on new services that will drive new revenue streams and help banks adapt to rapidly changing corporate demands.
The challenge for commercial banks is big but manageable, assuming that banks take the right approach and engage necessary expertise while recognizing that their corporate clients are also their retail clients.
However, the evolution to intelligent banking can’t wait. Today, the only question is whether your bank is willing to make the changes needed to satisfy corporate customers – or whether you will let competitors take the lead.
For more on digital banking, see Phase 1 Of The Retail Bank Client Customer Journey: Awareness.