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Are consumers and corporates really that different?

I had a dinner recently where we debated the relevance of
real-time in banking.

It was intriguing with the retail bankers saying that it is
a hygiene factor now to offer real-time as consumers expect and demand it, whilst
the corporate bankers were saying that real-time is less relevant for them as customers
may want it but are unwilling to pay for it.

The cost of real-time is also great, with most of those
attending saying it would cost them billions to re-engineer their businesses to
offer real-time, let alone to exploit it.

I then had a coffee with the head of transaction banking
from one of the major banks.  He wanted
to know what was important to trade finance and treasury.

We talked a lot about OTC Derivatives, collateralisation, Basel
III, standards, XML and ISO20022 … he then said: “what about mobile and tablet
computing?”

Hmmm.

Not so top of mind for me in treasury and those areas.

It’s there and thereabouts, but not top-of-mind.

This is borne out by the changing face of payments infrastructures
survey
 that we run every year.  The survey shows that the retail payments
clearers are being fundamentally challenged by mobile and tablet but the wholesale
infrastructures are far more focused upon resilience, scalability and security.

In other words, there is a chasm of difference between
retail and wholesale, consumer and corporate needs.

That’s pretty obvious isn’t it?

But then it makes me wonder another thing: aren’t consumers
consuming from corporates?

So the corporate and commercial bankers, the wholesale
infrastructure providers and high value payments processors have this idea that
real-time does not matter unless their customers will pay for it, and that
mobile and tablet computing is only relevant for the retail consumer crowd.

That’s just wrong.

It’s daft.

If the corporate client has the same demands as the retail banks
– consumers expect real-time as a minimum hygiene factor and all of their customers
are using mobile and tablet consumers – then the commercial bank is going to
have the same demands from the corporate client – they will demand real-time to
service their consumers and they will want mobile and tablet computing services
for their staff and clients.

Therefore, this delineation between retail and wholesale,
consumer and corporate, is just a misnomer smoke screen and it won’t last for
long.

Just watch, wait and see.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Real time information feeds are essential for benefits claimants faced with having to budget in a digital world and against the background of Universal Credit.It really is an elephant in the kitchen that bank CSR departments just don’t get.
    Failure to support government welfare reforms with suitable services will expose those banks where it is not top of the mind.

  • The irony is that whilst real time is a demand from retail bankers most of our major retail banks are still running systems that are based on a batch design – the exeception being Lloyds Banking Group where TSB (cruelly in the past often referred to as the Toy Savings Bank) had the insight of building their core banking system on hardware designed for air traffic control. Lloyds Banking Group have reaped the benefits of that decision ever since.