Corporate banking – learning from the consumer side of the business

Adopting a customer-centric approach to digital banking means different things to different banks.

In the retail space, digital transformation is creating a tension between the service levels seen amongst digital-first giants like Amazon, and those in non-digital businesses.

That tension is not as apparent within the corporate banking space. The same day delivery of groceries can hardly be equated to more efficient trade finance for machinery exports. Yet that connection is growing. There are many corporates who face consumers, including large firms like Amazon, but also small-to-medium enterprises (SMEs) who deal with other small companies.

So how and where do banks need to transform in the corporate space? Going back to the importance of the customer-first approach, banks need to present a single view of themselves to customers. That means they need to establish a group function that steers the strategy across all teams and facilitates the necessary steps, with group oversight. The digital banking change program needs to look for areas where the bank can easily improve service – such as allowing its customers to use a single ID for secure access to systems – in order to streamline the service offering while developments are made deeper within the enterprise.

Technologies such as distributed ledgers have the potential to remove considerable processing cost from the transfer of value, whether contracts or assets, and they may prove to be revolutionary in the trade finance space.

Transaction banking is often a highly manual business and in no small part this is down to the lack of standards that would facilitate automation. Engaging with the rest of the industry to find common ways of working sets a benchmark for the bank’s own understanding and potentially gives it insight ahead of time into the direction the industry will take.

Finally the bank must engage with its client base throughout the process. There are many industry forums where chief financial officers of major clients can voice their grievances. Banks that are nimble will be fast to market in solving these issues.

It may well be that banks cannot do this on their own. Partnerships with fintech providers and traditional tech providers can take the weight of development off the shoulders of beleaguered financial services firms. In many cases these reciprocal partnerships will be necessary as banks concentrate on changing their own businesses and assessing the future for their customers.