So I blast the corporate banking world for being slow to change and believing their customers won’t change … and maybe they’re right. After chairing a panel of large corporates including Jaeger, Virgin Media, Illy and Hotel Booker BV, the view seemed to be that banks were doing a good enough job and that corporates aren’t looking for innovation or new technology capabilities from their bank partners but other things.
For example, when asked: what’s most important from your bank relationship? the panellists focused upon the things they would pay for, which are things that help them provide:
- A Seamless Customer Experience
- Increased Brand Engagement
- Increased Loyalty of their Customers
- Security of Transaction
- Convergence of Technologies and Easier Connectivity
Now it’s true that technology can do all these things, or rather assist all these things, but it’s more a case of knowing their business and business needs, and how to deliver better transaction services to support what they are trying to achieve. Simplification came up for example, but the panel stated that simplification is not enough. It goes further and deeper than this.
For example, one of the panellists was a former banker and made a great point by saying that banks focal point in the corporate relationship is where things go wrong. Banks focus primarily on risk mitigation whereas the corporate wants conversion opportunities. Those moments when customers reach the end of an online purchase process and the sale falls due to the challenge of bank authentication and verification is a perfect illustration. So banks have improved this by dropping the need for the VerifiedbyVisa or MasterCard SecureCode when you’re using your home IP address, but even so, it’s not enough.
Corporates want banks to look at the end-to-end purchasing process of their business and simplify it in a way that is right for their specific business, in other words. In this context, it’s a little like incumbent technology firms as another panellist mentioned that banks go overboard on functionality and underwhelm on usability. This is because most banks are thinking about the bells and whistles they can add to their product from an internal, product-focused viewpoint; rather than developing capabilities that look at the revenue yield or cost reduction of the corporate trade process.
Now, I’m sure some bankers will disagree out there, but all-in-all it sounded like a mismatch of focus between the financial transaction deployment and the corporate customer need. The former is focused upon enhancing existing products and minimising risk whilst the latter is focused upon revenue yield through ease-of-use and simplification.
Maybe the two can come together and, in some banks, I know they are but it’s a tetchy relationship with push/pull demands and needs from both sides. Talking of push/pull demands, I finished the panel by asking if any of them were considering the use of cryptocurrencies in their trade processes? I might as well have just landed from Alpha Centauri for the reaction received, including the Virgin representative whose Chairman is so vocal about the future of bitcoin. Ah well, we always over-estimate the speed of change and under-estimate the impact.
Probably on the day that Richard Branson lands on Alpha Centauri all of these businesses will run on cryptocurrencies but, for now, can you tell me more about that FX netting and pooling app?
The current view of cryptocurrencies in Corporate Banking:
Photo taken from Live Science