Corporate banking solutions are entering an exciting period of development. Over recent years, those designed for corporate users have tended to deliver incremental changes rather than innovation. This is now changing: with a new focus on usability, banks are revisiting existing solutions to build meaningful ‘digital relationships’.
For treasurers, this could mean significant improvements to their existing banking technology. Instead of having to consult disparate systems to access information across payments, liquidity, trade and debt; they will benefit from a more holistic view of products and services. Meanwhile, enhanced digital communications will complement existing relationships, offering greater opportunities for banks and treasurers to work together more effectively.
Corporate banking relationships are ripe for greater levels of digitisation, but realising this vision may take time. A Gartner survey found that 62% of the institutions polled had started work on a unified digital banking or portal based solution, but over half had not yet appointed an executive to define and lead implementation. Those banks adopting a more proactive approach will be able to offer their clients competitive advantage in future.
The first electronic banking solutions were developed over 30 years ago following the arrival of inter-bank electronic transmissions. While corporate banking was way ahead in digital than its retail banking cousins, these solutions were designed to focus on functionality, rather than user experience. In the Nineties, the second phase of electronic banking saw attention turn to online browser-based solutions as they offered significant benefits over locally installed solutions. This effectively became a ‘lost decade’ for innovation with cost effectiveness becoming a priority for banks rather than adding new functionality or improving user experience.
In present times, due to the personal digital revolution with smartphones and web 2.0, people now expect and demand corporate banking solutions to offer the same convenience as they are accustomed to their personal lives. As a result, companies have included questions about usability when issuing request for proposals (RFPs). The focus is not necessarily shifting from functionality to usability but the latter is has become integral to the assessment of the right banking solution.
In the ‘brick and mortar’ world, the nature of corporate banking relationships is evolving. Historically areas such as cash, trade and loans tended to be managed separately, but more recently banks have adopted a broader view of their relationships to work more effectively with corporate clients. In theory, they would like to apply a similarly holistic approach to their corporate banking technology – but this is harder than it sounds.
The biggest obstacle is that corporate banking is characterised by numerous disparate systems, reflecting the specialised nature of the different activities and the depth of functionality required. This makes sense at an operational level, but not for decision makers who require a handle on all the areas.
For example, when a payment is made the payer may need to see information relating to the prompt for that payment – such as a guarantee maturing or a trade transaction. He/she will also need to see the balance available on the relevant account. If it shows insufficient funds, the person may need to draw down on their loan or access a short term investment. Thus the simple act of making a payment can involve looking at cash management, trade, lending and liquidity solutions.
The benefits of a consolidated view providing treasurers and decision makers with a snapshot view of their banking products and services are clear, but less than straightforward to delivery due to the need to cater for different types of users with individual priorities and needs.
Operational users who make several payments daily need a clear and crisp solution for carrying out this task as effectively as possible. Their user experience is not likely to be enhanced by having access to information about market research, new products or product updates. In fact, providing such irrelevant information could be counterproductive, creating noise that interferes with their core activities.
We believe that digital banking solutions should therefore cater for ‘personas’ or different views for different roles to address their individual needs. Barclays iPortal, the new offering, is built with this design principle at its core.
Another area of development is mobile banking. While it might not sound innovative, it is surprising rare in the corporate banking domain. Few UK banks have a mobile offering for their corporate clients.
This is perhaps a reflection to the fact that many corporate users have less need for mobile solutions – particularly payment clerks who may spend most of their time in the office and the person creating a payment instruction or trade Letter of Credit needs to enter additional information from the relevant invoice/supporting documentation.
Another consideration is that corporate banking payments tend to be much larger than personal payments, often extending to millions or billions of pounds. Different levels of security are needed for such payments – which often means installing software on the computer incompatible with mobile solutions.
Nevertheless, in certain situations mobile banking solutions offers significant advantages. For example, larger payments might need to be approved by a senior manager. If he/she is at a client meeting or conference, securing approval may be problematic – potentially leading to delays in the payment being made, or the need for a non-digital process to secure approval.
We believe that it is important to offer only relevant functions on mobile devices and tailored to usage of the device type. The smartphone apps should focus on alerts, payments approvals while the tablet-based solutions will be geared for information reporting in addition to the above.
Communication is one key area for digital relationship: corporate banks rarely communicate with their clients digitally, other than to exchange emails.
Alerts are commonly used in the retail banking context, but are less common in corporate banking. Often, the person responsible for approving payments has to be notified by the operational team that a transaction needs approval. While no one wants to be bombarded with hundreds of notifications daily, users do want to receive a relevant alert of something pending that needs their attention such transactions awaiting approvals or an account balance has fallen below a certain defined threshold. In line with the concept of Personas, different types of message will be appropriate for specific users, who will have control over the nature of the messages they receive. People will be able to decide when they wish to receive messages, as well as electing to do so via email, on their mobile devices or via their online dashboards.
As banks build more effective digital relationships, they will be able to tailor newsletters with information relevant to specific clients – and, indeed, to different people within an organisation.
Security is naturally very important and critical for corporate banking. For years, banks have opted for ever more complex password rules or complicated security solutions. However, lengthy passwords or need to install special software can prove inconvenient for the companies and are not conducive to building a constructive digital relationship. More recently, advances in biometric technology – such as finger vein patterns and voice recognition – enable customers to benefit from both convenience and state-of-the-art security. We believe that stronger security no longer has to come at the expense of user experience.
After years of focusing on the shift to browser-based solutions and marginal functionality improvements, banks view the concept of the digital relationship as a key differentiator. For corporate users, benefits could be considerable: a holistic view and streamlined experience will support better decision making.
At the same time, digital relationships will provide opportunities for banks to draw upon big data in offering customers other relevant services. For example, if a bank identifies that a customer trades with counterparts in Zambia, they could take the opportunity to initiate a conversation about related FX transactions. A clearer view of the overall relationship will make it easier for both parties to identify opportunities for further collaboration.
In conclusion, it’s easy to forget that corporate banks were the early pioneers of digital banking. While genuine innovation may have taken a back seat in recent years, banks are now working to develop solutions which will enable better digital relationships – from an improved user experience to the effective use of digital communications.
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