What are the Top Trends and Challenges for Corporate Banking


Q&A with Thomas Zink

HOW ARE BANKS RESPONDING TO DIGITAL TRANSFORMATION AND THE EMERGENCE OF NEW TECHNOLOGIES Corporate banking is taking giant steps forward to embrace and explore new technologies such as distributed ledger technology and machine learning as well as to adapt to changing operating paradigms such as open APIs. Arguably, these topics reflect the biggest hype topics for the overall banking industry, but unlike previous years we now see real implementations, commercial rollouts, and widespread investment, particularly in data analytics and increasingly in machine learning capabilities. Some examples include dynamic and predictive pricing optimization capabilities or using machine learning to counter fraud, cyber-attacks and new compliance requirements. An industry, that has always been extremely focused on efficiency is now zooming in on driving automation and productivity to new levels.

There is a broad spectrum of needs from corporate customers, but banks tended topaymost attention to those largecustomers that are now increasingly building their own capabilities in-house, and largely use banks to execute transactions. However, there is a massive opportunity in the medium and small enterprise space, that has been largely ignored by FSIs in the past. These organizations are looking for ways to simplify and optimize their payments efficiency and liquidity position, and don’t necessarily have the talent or the IT$ to do these tasks in-house. Furthermore, these corporations not only look for ways to reduce their financing costs, but also struggle with a growing compliance burden and the considerable risks of a volatile and fast-moving connected operating environment. FSIs are in a unique position to expand and improve their value proposition into these segments by not just maximizing transactional fees, but helping these organizations leverage data and serve as a trusted adviser and financier to help them achieve their business objectives. WHAT ARE THE BANKS´CUSTOMERS LOOKING FOR IN A BANK PARTNER AND WHICH CAPABILITIES WILL HELP TO COMPETE IN AN INCREASINGLY COMMODITIZED ENVIRONMENT

The hottest topics today are clearly around open banking and machine learning, the two topics that clearly dominated Sibos 2017 in Toronto. However, with the noise level increasing, it is all the more crucial to drill deeper into the business objectives of FSIs, rather than upgrading traditional technology and product discussions with the latest hype. With business units playing an increasingly important role in influencing or making IT decisions, vendors need to move away from product, technology-centric, and pseudo innovation discussions and focus on addressing the real problems of the industry. These include forecasting and managing credit, fraud, compliance and market risks; empowering a dynamic, data-driven pricing strategy; identifying and addressing attrition before it happens, and taking security to the next level without disrupting business and proven processes. And last but not least in the new era of openness, enabling FSIs to drive innovation and differentiation through Fintech collaboration by developing open APIs and platforms/marketplaces that can be easily accessed, managed, and secured in order to give FSIs the choice, flexibility, and agility to succeed in a difficult market environment. FSIs are still at the early stages of the open banking journey and most of them lack the vision, capabilities, and talent to drive an open banking strategy internally. WHAT ARE THE HOT TOPICS/ THEMES THAT WILL ALLOW VENDORS TO ENGAGE THEIR CUSTOMERS?

Thomas Zink Associate Research Director, IDC Financial Insights tzink@idc.com

Worldwide Corporate Banking Digital Transformation Strategies, e-mail Thomas Zink at tzink@idc.com For more information about IDC Financial Insights:

IDC Financial Insights EMEA @IDCInsightsEMEA | #IDCFI www.idc.com | Insightseurope@idc.com @

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