Club @ Sibos
M
any banks now recognise that to remain competitive – in
both the retail and corporate banking sectors – they must
become integral to every part of their clients’ lives. The
march stolen by some non-banks in retail banking has served as a
warning for corporate banks; the traditional transaction banking mod-
el is under serious review.
While every bank wants to be corporate-centric, not all are in the
same position to embrace the change they need to, Michel Jacobs,
head of global sales, digital and payments at iGTB told Club@Sibos.
“If a transactional bank is not aiming to become an integral part of
the corporate supply chain, to be able to truly optimise and maximise
the use of capital, efficiency and processing on behalf of the corporate
and use context to truly understand what to do… they will have a hard
time.”
Like the retail banking world, corporate banking is rife with com-
petitors, including fintechs such as money transfer company Trans-
ferwise, which recently reported its second profitable year in a row.
The London-based company reported an annual post-tax net profit
of £6.2 million for the fiscal year ending March 2018. Annual revenue
nearly doubled to £117 million during the period, from £66 million the
previous year. The company said USD3.9 billion worth of transactions
is moved around each month by its more than 4 million users.
The principle of contextual banking, said Jacobs, is to focus less on
the transaction and more on the interaction, understanding what a
corporate wants to do and using machine learning (ML) to understand
why. Once a bank understands the what and why of a transaction , it
can maximise and optimise the execution, leading to better advisory
services for corporates who can then make better decisions about
their use of capital, for example. Such a focus will also enable banks
to help their corporate customers leverage new capabilities such as
real-time services.
“Banks can use the context of a transaction to truly understand what
to do. If they don’t aim for this, they will have a hard time because
there are many competitors going after the payment market,” he said.
For Diane Reyes, head of global liquidity and cash management at
HSBC, customer centricity is all about fair outcomes for customers.
“First and foremost we have to listen to what it is they are telling us
and actually solve the problems
they have. So we have to have
some empathy in that regard.”
Lisa Vasic, head of transac-
tion banking, Australia and
Papua New Guinea at ANZ,
told Club@Sibos that customer
centricity required an under-
standing of what customers are
trying to achieve in terms of the
outcome of their business and
how banking can help in the de-
MICHEL JACOBS, IGTB livery of that. “Customers don’t
want to distinguish between
types of products and how they
fulfil an internal process,” she
said. “Banks must understand
clients are looking for an experience that is easy, transparent and
provides value.”
A challenge for banks, however, is that value-added services have
grown organically, creating complex infrastructures and mechanisms
through which capabilities are delivered. Centricity should be focused
on simplicity, delivering services to clients in a way to make their lives
easier. Digital technology plays a big role here, said Vasic, as does the
recognition that banking is part of a broader community.
This was evidenced in the launch of the Trade Information Network
at Sibos. Shortly before Sibos, ANZ, Banco Santander, BNP Paribas,
“Banks can use the context of a
transaction to truly understand what
to do. If they don’t aim for this, they
will have a hard time because there
are many competitors going after the
payment market.”
6 | CLUB@SIBOS | Bringing the world to Sibos and Sibos to the world
CORPORATES
Citi, Deutsche Bank, HSBC and Standard
Chartered announced a joint initiative to
build the digital Trade Information Network
by the end of 2018. Once operational, it will
become the first inclusive global multi-bank,
multi-corporate network in trade finance.
The Network aims to address the unmet
demand for financing earlier in the supply
chain by enabling corporates to communicate
trade information easily and securely directly
with banks of their choice. In addition to
the founding banks, more than 20 additional
banks from around the world are participat-
ing in developing the Network and several
corporates have expressed an interest in
participating in pilots.
The Network has open architecture and
standardised connectivity based on a gover-
nance model similar to Swift to achieve max-
imum adoption across the supply chain eco-
system. Corporates will use a simple one-time
registration process which will allow them to
connect with all banks on the Network.
“Centricity is about how we look to the
future and understand how customers are
thinking and also the problems fintechs are
solving and what opportunities working with
them provides,” said Vasic.
If a transaction bank is not totally focused
on its client, “it shouldn’t be in business”, said
Rosalie Fink, global head of FI product man-
agement at Bank of America Merrill Lynch.
Customer centricity begins when products
are designed, with a focus on making it easy
for corporates to do business with the bank.
A corporate client’s main business is not
banking, nor making payments, she points
out. “We service a lot of different clients –
from consumer focused organisations to large
corporates. We have to find the right solution
for each of them,” she said. Such a service
must be straightforward – clients should not
have to “go all over the organisation” to find
answers.
HSBC’s Reyes identifies four ways banks
can stay relevant to their corporate clients:
training and education, internal development,
partnering, and customer centricity. A digital
leaders’ programme at the bank helps to train
and educate staff, with leaders within dif-
ferent bank departments taught about agile
methodology and user experience design.
Reyes said this helped staff to understand
how the IT and product managers worked.
Like an increasing number of financial insti-
tutions, HSBC also sources applications from
within its own teams for use in its internal
applications. One of Reyes’ staff members
developed robotic software that pre-loads
customer information. This demonstrated to
clients that the bank is focused on efficiency
and can utilise AI and ML.
In addition to partnering with fintechs,
HSBC also partners with regulators. All banks