Banks adapting digitally to meet new enterprise demands

Banks are innovating digitally in order to meet the needs of a new generation of enterprise customers.

 

This was the major finding of IT services provider NTT DATA’s latest annual global banking report which compared the latest demands from the largest corporate businesses with the current investment priorities of global banks. The report identified a shift in post-pandemic corporate banking towards more integrated, digitised, sustainable services aligned to the new generation of millennials taking up senior positions in corporate businesses.

 

The research was conducted across 12 countries and interviewed 880 senior decision-makers across banks and corporates to gain an understanding of how corporate banks must futureproof themselves. It found that accelerated adoption of technology combined with generational shifts in clients, and the ongoing recovery from a global pandemic has fundamentally changed banking.

 

Corporates are now three times more likely to communicate primarily with their bank through APIs versus communicating person-to-person. The traditional corporate banking image of personal client relationships is confined to history as corporates prioritize end-to-end digitization and frictionless banking. Some 85% of banks report they are working on rationalizing their portals, a change driven by client-centricity and improving the customer experience.

 

“Our research found the future of corporate banking is more integrated, more digitized, and more sustainable,” said Miguel Mas, Director, Global Corporate Banking with NTT DATA. “New regulation is one driver behind change, but ultimately, it’s a generational shift that’s redefining how banks need to operate. We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”

 

The research found that banks increasingly need to fuse their services with the evolving needs and demands of their customers. More specifically, corporate demand is shifting from traditional trade and working capital products to more structured products. Technology is changing too. Banks are starting to bring in more automation and they are using advanced machine-learning-based models in areas such as credit risk analysis.

 

There was evidence that banks need to listen to their corporate customers and their specific industry needs to deliver the services they demand. For instance, 70% of construction companies report unmet demand for omnichannel corporate cash management and lending solution. Product offerings still sit outside the integrations of their commercial banking platforms.

 

ESG has become a key consideration for corporate banks. As the world looks to the future, regulators and policy-makers are becoming more vocal about the need for greater adoption of ESG. They recognize that moving towards a low-carbon economy is going to create additional complexities for financial services firms – and increased risk too as companies they service adapt.

 

Corporates want to bank with a firm that reflects their own views and beliefs as a new generation of corporate banking clients are prioritising the environment and sustainable banking. The study found 48% of corporate respondents wanted their banking provider to invest in more “green” or sustainable products and services. This demand is being met – to an extent. On the banking side, 44% report they are already investing in it.

 

“Sustainability is a key battleground,” concluded Mas. “Almost half of corporates want more investment in this area from their banks and the most forward-looking are building ESG-focused product teams to work on solutions to satisfy this need. It’s also a business opportunity that could gain them an edge over competitors.”

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Book of the Month*

The Serendipity Mindset: The Art and Science of Creating Good Luck

By Dr Christian Busch
Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

Chance encounters, or strokes of fortune, feature in countless stories of business success. This book looks beneath the surface, reveals and teaches the mindset that can transform pure chance into opportunity. The author is director of the Global Economy Program at New York University’s Center for Global Affairs, and a lecturer at the London School of Economics.

Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

The author says “This is a book about the interactions of coincidence, human ambition and imagination”. In the above example: finding the wallet is the coincidence; ambition is the desire to make something of the discovery; add imagination and you open up a whole menu of possibilities: from spending spree to earning a reputation for honesty – or even making a wealthy friend.

Business is typically forged on human ambition and imagination, but early success often feeds an appetite for control – and “control freaks” can be blind to the opportunities thrown up by the unexpected. They only see chance events as distractions. If plans go awry, they may blame the failure on “bad luck” rather than admit their own inflexible attitude.

The author himself admits to being “a German who is used to planning” and prone to feel anxious when something unexpected happens. That makes him an ideal teacher, because he has worked hard to discover and analyse the mindset that enables one to “connect the dots” and cultivate serendipity. He presents a goldmine of examples from science, business and life where an apparent mishap or failure lead to a breakthrough.

Indeed, studies suggest that around 50% of major scientific breakthroughs emerge as the result of accidents or coincidences. A well-known example is Alexander Fleming’s discovery of penicillin, launching the whole field of antibiotics. Other examples include X-rays, nylon, microwave ovens, rubber, Velcro, Viagra and Post-it Notes – where would we be without these!

The book goes beyond the ability to recognise and respond to opportunities in chaos, but the subtitle – The Art and Science of Creating Good Luck – is actually a bit misleading. True, he does show ways to develop better fortune, but it would be better to call it “inviting” or “encouraging” good luck. For example, he suggests better ways to start a conversation with a stranger – ways that will make it more likely to lead to chance connections or shared interests.

The publishers may have chosen the word “creating” to make the book appeal to the human desire to control – for control freaks are exactly the readership that would benefit the most from this book’s wisdom and practical advice.

For the rest of us, it offers a great way to rediscover the sense of play that is so important in life – and too often lost in business.

 

“Following the success of The Serendipity Mindset hardback, a paperback edition has also now been launched under the title “Connect the Dots”.

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