Digital transformation of corporate banking: the snowball effect

Many banks have focused their-long term system enhancement strategies around digitization of consumer banking – a vast but not especially profitable segment.

This trend bought about a growing disparity between the said area – and another one, corporate banking, which started to lag behind its overprivileged cousin before we even knew it.

The complexity level of corporate banking along with higher implementation costs related to it were some of the sensible reasons why a great deal of bankers focused on the average Joe instead.

The other side of the story is: ask a pool of banking executives whether corporates they cater to are satisfied with their online banking software, and chances are 80% of them will nod to that, taking an educated guess. Not broken, don’t fix it.

Not many of them would be willing to put their money into something that at the first glance might not seem to be crucial for the business.

But the first glance might be misleading. In the real world, according to Boston Consulting Group, as little as 8% of users are pleased with the level of digitization their banks are offering. What is worse, 60% openly admit that they would switch to another bank if it provided better digital tools.

Well, the old saying among bankers that the customer will not leave because they are too weighed down by multiple products has to be put aside.

Omnichanel banking is the true value that customers so vigorously seek. Some did realize the potential of seamless digital solutions though. Numbers don’t lie: the majority of banking profits come not from the vast number of retail customers but from a moderate bunch of corporates. That’s what prompted forward-thinking bankers to digitize the corporate area and make it more user-friendly – and then their priorities began to shift.

We were there to see it, working closely with world-famous banking groups scattered throughout three continents, Asia included. One major thing we did for them was automating thousands of routine activities their corporates do on a daily basis. Think mass transfers – dozen of thousands of them at a time – facilitating the management of a large number of payment orders, with an option to process the whole batch as a single order. Virtual accounts that settle hundreds of thousands of payments, each of them coming from a different payer. This is just a tip of an iceberg.

The banks that decided to be the first movers in terms of modern corporate solutions are like classic snowballs that keep growing in momentum and size when rolling down a hill.

In time, more snowballs will appear. They shall all cause an avalanche of change coming down across banks and country borders.

What then? You can either ride the change, or be swept by it.  

Dariusz Trocyszyn, Business Solutions Consultant, Comarch