Corporate Banking: Clear Sky Thinking

by Steve Murphy 0

The article summarizes the ongoing movement towards corporate banking digitalization, although we are not really sure that the title conveys this.  In any event, starting off with Swift gpi (being challenged in many ways by fintech startup Ripple, which held a concurrent conference with SIBOS this week in Toronto) and then moves on to the broader topics impacting corporate banking.

First is a focus on re-intermediation through legacy transformation, with banks simplifying fragmented corporate banking back-office platforms. The manifestation of this has been a focus on the digitalisation of commercial routines in the end to end credit process. According to Finastra research, conducted by McKinsey and Co in 2017, 60% of corporate banks said corporate and commercial lending is the priority area for transformation, with 40% saying they are now challenged by corporate clients on the issues of “time to yes” and “time to cash”. Another key driver is trade and supply chain finance. Transformation here, says Singh-Jarrold, involves the integrated delivery of a full range of cross-border working capital solutions, while also finding ways to digitally connect buyers, suppliers, distributors and other participants and marketplaces. An overarching goal is to remove paper from the process.

We have covered this transformation extensively, most recently in a report entitled Digitizing the Corporate Cash Cycle: Advancements and Partnerships.  The corporate solutions delivery part of the industry is the subject of lagging but accelerating use of latest gen tech to begin creating the same type of experiences that people expect in their every day lives. This is evident in the bevy of recent announcements (which will be ongoing through 2018) about collaborations, partnerships and acquisitions, as the corporate side of the FI houses transform and adapt to the new world of financial services.

Agility and speed to market is important to the success of financial institutions; they need to deliver those new technologies faster than ever before. “At Bank of America Merrill Lynch, we are working alongside fintechs, clients and industry consortiums on developing these innovations. In some cases, we’re also investing in our own platform. Bottom line – we’ll work with the best technology solution no matter where it originates so long as it directly helps our clients adapt to the challenges of an evolving and complex world.”

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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