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Why is corporate banking struggling to achieve digital transformation?


Despite the challenges, the financial services industry has, for the most part, embraced digital banking. Traditional banks, insurance companies, and other institutions are making progress with digital transformation, offering value-added services and streamlined experiences.

There is one exception, however – corporate banking. The trouble corporate banking sector is having in delivering new customer services is understandable, considering the scale and complexity in providing robust and functional corporate banking solutions. Think of the massive commercial loans, the international transactions across banking systems, and the management and advice involved. It doesn’t seem congruent with the simplicity and speed of two-click banking.

But when banks fail to improve and offer a greater range of services, innovative newcomers sweep in and take action. While there are some corporate banks who have embraced digital offerings, most of the industry is lagging behind. Why has it taken corporate banking executives so long to react?

One reason could be that it has traditionally operated as a relationship business. But it’s also a very complicated transition that isn’t just a matter of implementing new banking technologies or machine learning capabilities. Corporate banks offer a large range of products with a host of accompanying regulatory and compliance issues that have to be fulfilled during each stage of the product.

However, corporate clients are expecting a whole lot more than they are getting. Quite simply, they expect the service and convenience that makes up their customer experiences in every sphere of their life.

What do corporate customers want?

The key to ensuring continued or new revenue streams in the future is to provide house services that customers actually want and will respond to. The following areas must be kept in mind for a corporate bank’s digital transformation strategy to succeed.

Smooth, efficient onboarding

Onboarding is a vital step in the client journey, but in corporate banking it can take days or several weeks. Many still rely on manual and paper-heavy processes that take too long to complete. Given that onboarding involves a lot of personal data and legal data, innovation is required to make onboarding secure, accurate – and carried out in a faster time.

What’s more, banks are aware of this issue. In a NTT DATA survey, 44% of banks report the need for more investment in onboarding and 39% say their customer onboarding is too slow. Despite the challenges, corporate banks need to embrace digital tools to enhance the process.

Increased visibility

Clients want real-time visibility into each day’s financial transactions. With a view into their company’s liquidity position in real time, they can make better-informed cash management decisions. More than two-thirds surveyed by BCG want digital technologies that allow them to access their information in less than three clicks, particularly when it involves carrying out routine tasks, such as reviewing bank statements and submitting documentation.

Straight-through processing

When it comes to personal banking, customers can be pre-approved for mortgages and transfer funds or make international payments in a matter of minutes – so they expect no less in a corporate banking context. They also don’t want to log in more than once and respond repeatedly to information requests.

The bottom line: an experience defined by convenience

Overall, corporate banking clients are expecting a whole lot more than they are getting. They expect the service and convenience that makes up their customer experiences in every sphere of their life. Think of the CFO who receives a batch of wire transfers for approval. Rather than being tied to the office to finalize the transfers on a desktop, the CFO should be able to handle them instantly and securely on a mobile device.

Corporate banks’ services should be user-friendly and intuitive, but it’s also vital to give clients multiple channels through which to engage with their bank. These should be a mix of channels that are supported by mobile devices, as well as telephone services and video meetings for higher-touch operations with relationship managers. Every banking journey will look slightly different, so it’s important to give clients flexibility to navigate evolving needs throughout the client lifecycle. According to Forrester, among CFOs top priorities are real-time analytics and innovation applications.

Even with the aid of artificial intelligence, human-centered design adoption is at the heart of a hybrid experience. While also giving clients the option of self-service, a hybrid approach should build the human touch into every step of the journey. This could be through a live chat, phone call or video meeting – but the bottom line is that human interaction is accessible from a digital channel. CX platforms, therefore, should be interconnected and user-friendly.

The interplay between the digital and the human is the core power of a hybrid client experience. Ultimately, both are required for a fulfilling multi-access experience. Groundbreaking use of AI and digital platforms may delight engaged clients in one interaction, but human conversations will be necessary to deepen the bank-client relationship in another.

How do the right digital tools enhance the corporate banking lending experience?

A new era of corporate lending has arrived and financial institutions need to adjust. Corporate lending timelines must be reduced from a month or more to a matter of hours – while ensuring a seamless digital experience. Banks are searching for new ways of doing business to automate workflows, without sacrificing the personalized experience corporate banking clients expect.

The right digital banking tools are a key part of this transition. Here’s how digital solutions enrich the lending experience, ranging from onboarding to expert, ongoing support.

Digital corporate banking infographic