In this day and age, very often when we speak of innovations within the FSI and Fintech space, the norm is to have a very heavy focus on retail banking. From chatbots to wearable banking, a quick glance of what’s making headlines in this space tells a narrative of digital innovations centered around improving the customer experience within the retail space and the enterprise client is often sidelined.
However, this should not remain the case, seeing as how the majority of a bank’s profits comes from their enterprise clients. For example, if one were to look into the annual reports of some of the top banks in Malaysia, one would notice that over 50% of their profit before tax is derived from their enterprise clients.
The industry as a whole needs to step up their game in corporate banking technology, this is evident in a report produced by EY which indicates that in terms of degree of importance, corporate finance professionals rate technology sophistication at 65% and innovation at 63%. Another study conducted by BCG indicates that 60% of enterprise clients are willing to switch to banks capable of delivering integrated omnichannel services.
This presents both an opportunity and also a threat for the banking sector, for the banks who are willing to transform their services stand to gain an entire segment of customers whereas for those who refuse to innovate will lose clients to more progressive banks. The same study from BCG indicated that laggards can potentially lose up to 15-30% of their profits. It is important to remember that the same enterprise clients that we serve, so in their personal lives are also the same people who are exposed to the conveniences accorded by the consumer banking businesses. Banks need to be able to deliver the same omnichannel experience in corporate banking business as they do with their consumer banking business.
Take for example ING in Poland who began working with Comarch in 2007 to overhaul their corporate digital banking. Through this partnership, ING has introduced a slew new digital innovations for their enterprise clients. The platform allows for quick entry and verification by the operation department and a holisitic overview for quick approval for the decisions makers which includes account status, list of orders pending authorisation and other key banking information.
These conveniences are all made available via multiple channels which includes desktop, mobile and wearable banking enabling busy executives to make important financial decisions on the go. By providing these services, ING differentiated itself from its competitors by adding real value to their enterprise clients versus being a “dumb pipe”.
Within the time frame of 9 years after implementation, ING has witnessed more than 10 times increase of enterprise clients on their platform and over 20% of which are on the mobile platform. Being the first bank in Poland to have implemented this has also gave ING a significant first movers advantage.
Could this potentially be the new norm for digital innovation in the corporate banking arena? As enterprise clients ourselves, we certainly look forward to see more advancements in this space.
Comarch will be presenting and exhibiting at the upcoming BankTech Asia on the 5th – 6th July 2017. If you’re interested to understand more about the case study or the solution do drop by at their booth or join the conference where Maciej Salata will be presenting more on the ING case study.
About the Author
Vincent Fong is the General Manager of Knowledge Group and a self-proclaimed pundit of banking technology and fintech