Leveraging APIs and Real Time Connectivity to Launch New Corporate Client Propositions
Earlier this year I wrote a blog "US Corporate Real-Time Payment (RTP) Adoption: If You Build It, Will They Come?" discussing how at the 2019 NACHA Payments conference, leading banks and technology providers stopped talking about RTP as yet another payment rail, and shifted their focus to how RTP can enable new use cases and solutions, whether B2B, B2C, or C2B. During the conference, and throughout 2019, leading treasury management banks and technology providers announced a bevy of customer-facing value-added solutions for their business clients, leveraging APIs and real-time connectivity.
Yet, I continue to hear some banks lament corporate treasurers’ lukewarm demand for real time payments, causing those financial institutions to postpone investments in business-focused APIs due to the lack of a clear business case for investment. Those conversations prompted me to undertake research into why more banks aren't investing in APIs for commercial products and services, setting themselves up for success with their corporate clients.
I've recently published the resulting Celent report "Creating Value-Added Services for Corporate Clients: Overcoming Barriers to Adopting APIs." In the report I answer three key research questions:
1. What are the barriers to delivering API-enabled, value-added services to corporate clients?
2. How can banks overcome barriers to adopting APIs for commercial and corporate banking?
3. How are banks and nonbank providers leveraging APIs to create value-added services for corporate clients?
Barriers to Delivering Value-Added Services to Corporate Clients
Celent's extensive analysis of open banking developer portals around the world shows that few banks have exposed APIs for commercial products and services, including access to company profiles, current account balances and transactions, and business services such as wire transfers and foreign exchange contracts. Beyond a lack of a clear business case for investing in APIs, banks are hampered by the limitations of their legacy technology infrastructure, insufficient knowledge of APIs, and perceived risks with the technology.
Overcoming Barriers to Delivering Value-Added Services to Corporate Treasurers
Next, I outline key steps to overcoming barriers to adopting APIs for commercial and corporate banking: enabling real time connectivity, learning more about APIs, creating a compelling business case, and managing risks associated with APIs and open banking.
Solution Profiles: APIs and Real Time in Action
Lastly, I profile banks and nonbank providers alike that are leveraging real time APIs to drive business results with value-added services using APIs for integration, Banking as a Service (BaaS), banking innovation, and client connectivity.
The Path Forward
The stakes are high. Corporate banking revenue, especially cash management, continues to offer attractive returns for those banks able to remain competitive. Growth will be driven by new propositions that solve problems for corporate treasurers. Want to know more about success stories or getting started? Feel free to download the report or get in touch.