What Is the Future of Digital Corporate Banking?

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Introduction

The technological disruptions in the past decade have nudged several business sectors to carefully assess their business processes and reevaluate their priorities. Admittedly, the banking sector lethargically hopped on this bandwagon.

Although the banking sector slowly adapted technological advancements, it has tremendously benefited from technological innovation. Digital corporate banking witnessed its first tech overhaul with analytics, data, and social platforms. This digital-first strategy is ushering the banking sector into a new era of digital transformation in banking.

Nonfinancial, tech-savvy businesses pioneered the past decade of digital innovation. This altered the business landscape across industries and also changed customer expectations drastically. Complete banking transformation is a must for the banks to eliminate barriers to growth, stay relevant, and become future-ready.

Corporate banking challenges are still in their nascent stage. If the banking sector can accelerate the pace at which future banking technology is embraced, it will have a better chance to thrive and remain profitable for the foreseeable future.

What is Digital Corporate Banking?

Digital corporate banking refers to a specific segment of the banking sector that provides financial and banking services to corporate clients via digital channels. This includes corporate account management and maintenance, digital cash management, transaction management, account onboarding, account setup, and other essential corporate banking features.

From a commercial banking perspective, digital corporate banking has several advantages; some of the most prominent benefits are seamless customer experience, faster customer acquisition, expedited service delivery, and a reduction in operation costs.

Corporate banking is very different from consumer banking; corporate clients are restless and if their requirements are not met, they have no reason to remain loyal. Performance and agility are the two important factors that corporate clients look for in their commercial banking partners. Financial management of huge corporations is a challenging endeavor. Corporate clients want to partner with banks that can help navigate the complex financial ecosystem with the help of digitally-enabled corporate banking solutions.

Banks that are short-sighted with reactionary measures as their primary strategy will continue to lose out on this opportunity. However, banks that are equipped to address this need will always be viewed in a favorable light by corporations.

Now that we have understood the need and importance of digital corporate banking, let’s learn more about what the future of digital corporate banking entails.

The Future of Digital Corporate Banking

Digital transformation in financial services will define the next decade (and beyond) of the commercial banking ecosystem. A few key technologies will facilitate this inevitable banking transformation. This section gives you a brief overview of what they are.

3 Key Technologies for Digital Transformation in Banking

Artificial Intelligence

In order to map accurate customer journeys and offer a rich customer experience across multiple touchpoints, banks will rely on the capabilities of artificial intelligence. Artificial intelligence (AI) combines the power of advanced data and analytics; this combination offers key insights for better decision making. AI allows banks to combat fraudulent transactions and improve compliance. This will boost customer sentiment and increase trust.

Additionally, with the help of predictive analytics, banks can understand future scenarios and customer behavioral patterns by analyzing past behavior. Armed with this information banks can customize financial products and services and deliver a wholesome customer experience. By delivering personalized services banks can build strong relationships with customers. This will significantly improve customer engagement in banking, resulting in overall business gains.

Blockchain

One of the most transformative technologies to enter the banking space is blockchain. A technology that was initially developed for tracking Bitcoin transactions has now gained global prominence. Blockchain offers high-security and low-cost capabilities for cross border payments and other financial transactions. For this reason, blockchain will be one of the vital corporate banking trends in the coming years.

Because of the way the banking infrastructure was built, an average transaction takes up to three days to get clearance and settlement approval; one of the biggest advantages of blockchain is its method of verifying and tracking transactions. Blockchain enables banks and it’s partners to process transactions without the need for third-party verification or a central bank.

This provides a reliable alternative to the current method that needs to go through several intermediaries. Along with decentralizing trust blockchain offers other benefits such as enhanced security, decreased costs, and improved efficiency. Therefore, banks that design corporate banking products that integrate blockchain into their processes will have an unmatched advantage over their competition.

Robotic Process Automation (RPA)

Robotic process automation is nothing but the use of software tools, commonly known as bots, that are programmed to complete repetitive and labor-intensive manual tasks. It is estimated that RPA can reduce manual efforts by 65% and dramatically increase efficiency for all corporate banking functions.

Tasks such as sending emails, filling forms, opening applications, client documentation can be completely automated with RPA infrastructure in place. For instance, RPA can check a client’s loan eligibility in just a few automated steps. A process that requires a bank employee to manually check every step is replaced by a software tool that can finish this task under 10 minutes.

RPA is easy to customize and extremely fast to implement. Robots can also work 25/7 and 365 days per year. This boosts employee morale and allows them to focus on value-add services that require human interaction and complex decision making. Therefore, in the upcoming years, RPA will become an important part of corporate digital strategy.

Conclusion

In conclusion, it is safe to reiterate that digital corporate banking is due for yet another overhaul that integrates advanced technologies in everyday banking practices.

The banking sector is trying to become a customer-centric industry focused on delivering financial services that cater to every single need of their clients. Technologies such as AI, Blockchain, and RPA are the upcoming corporate banking trends that can propel this agenda forward. They have the potential to democratize banking operations, encourage transparency, and rekindle the sentiment of trust.

digital banking concept -DepositPhotos

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