On September 4, I will be joining an online panel organized by SAP and Finextra to discuss the possibilities – and the pressures – for corporate banking in the 21st century.
In some ways, what corporate customers want from their banks remains unchanged: the fastest and best possible service, combined with flexibility and understanding of their business. However, a rising tide - of technological innovation, regulation and speed of business - has transformed what those expectations mean. Corporate-bank relationships are now about far more than completing transactions and meeting regulations.
Social and mobile business
Social software has changed the way customers interact with businesses, and those changes are feeding into the way businesses organize themselves: Microsoft spent $1.2 billion to acquire Yammer in 2012 in order to offer an enterprise-oriented social network. As corporates build the immediacy of social networking into their reporting systems, how can banks match that reactivity?
The move from physical business to online business to the physical, online and mobile – among many channels - is also having a transformative effect. According to Pew Research, in January 2014 58% of American adults owned a smartphone. Corporates need to be able to transact using mobile devices and apps, and also provide and receive vital data to mobile devices, to inform everything from executive decisions to split-second offer management. And, as mobile device usage proliferates within corporates, banks need to be able to adapt to new kinds of inputs, and new expectations for always-accessible functionality and data.
Service in the cloud
For consumers, and increasingly for businesses, the debate around the cloud is over. Individuals, encouraged by the smaller storage space of mobile devices, store and share files and photographs in the cloud. Businesses deliver services, internally and externally, using public and private clouds. But banking has been reluctant to embrace the cloud, due mainly to security concerns.
Now, as customer requirements and tighter regulation demand more of banks, the cloud offers a way to address many issues in next-generation corporate banking with a single solution.
One benefit corporates have been seeking is standardization, in onboarding and payment processing. When a large corporate may have relationships with many different banks, in many different geographies, inconsistencies in their processes can rapidly become expensive and time-consuming.
And banks not only need to ensure that corporates are brought into their systems efficiently, but that they are able to deliver crucial reporting data in real time, and deliver new services as the needs of the market evolve.
Under these pressures, will 2014 see further adoption of the SAP Financial Services Network and related cloud services? Will banks take the opportunity to move critical but routine services to a cloud-based provider, with performance guaranteed by service level agreements, in order to concentrate on new products and services that differentiate their offering? Will the move to the cloud be driven by banks seeking to enhance their offering to corporates, or by corporates demanding improvement from banks?
Making the change
The cloud is proving to be one of the most disruptive innovations since the Web, and the questions it raises for banks need to be answered. The right approach can strengthen relationships with existing corporate customers and attract new business, but banks need to think carefully about what customers need, and how to provide it. And the corporate is not the only “customer” –migrating services to the cloud will need executive buy-in within the bank, and a successful cloud strategy will adapt to legal and regulatory demands across different regions, while giving the corporate a single, unified experience.
Discussing these issues with me will be Dmitry Simakov, Director of Citi Treasury and Trade Solutions, Connectivity Services – EMEA, and Michael Verholen, Global Director, Treasury, Grief. Click here for more information, and to register.