THREE EXTERNAL FORCES DRIVING CORPORATE BANKING CHANGE
Corporate bankers face a 2020 landscape shaped by three powerful external forces:
Corporate banking remains an attractive growth segment, with projected revenue growth of 3-4% over the next few years. Cash management and payments continue to offer especially attractive returns for those banks able to remain competitive. Competitiveness shouldn't be assumed, however, as the largest global banks engage in a technology arms race in an effort to grab an out-size share of revenue pools. New and improved client-facing propositions will dislodge large revenue pools from corporate banking incumbents that fail to innovate in the face of billions of dollars committed to technology innovation by Tier 1 banks.
Manual processes combined with limited treasury staff continue to be top operational challenges for treasury and financial professionals. Banks are well-positioned to help clients to transform corporate treasury, incrementally digitalizing and digitizing their operations, enabling step change with new liquidity management tools, and introducing new, game-changing technologies. Some banks have started down the road to Treasury 4.0, but non-bank tech providers are outpacing the banks, putting additional revenue at risk.
Incumbent banks continue to struggle with inflexible, expensive legacy systems combined with inefficient support processes across product silos. To drive profitability and release the budget needed for growth initiatives, banks are looking for ways to generate efficiency gains while reducing pain points for customers. Client-facing processes such as customer onboarding and loan origination are obvious candidates, along with less obvious candidates such as traditionally siloed payment systems and operations.
These forces imply a set of specific technology priorities that banks should embrace. We’re going to focus our research efforts on helping bankers (from line of business executives to technologists, strategists to implementers) educate themselves about key technological questions, prioritize their spending, and execute their strategies.
VendorMatch, Celent’s new vendor discovery tool, is playing an increasingly important role in our vendor analysis. See more at https://www.celent.com/vendormatch.
2020 RESEARCH THEMES
Five areas will dominate our corporate banking research. As always, we'll respond to fast-moving developments in our research space, with analysts focusing on Treasury 4.0, new technologies driving differentiation, accelerating efficiency savings with digitalization and digitization, the pace of change in payments, and, of course, our flagship Model Bank Awards (to be published in April).
From Industry 4.0 to Treasury 4.0
Industry 4.0 is bringing the digital and physical worlds together, changing the way we work and interact. Treasury will borrow a page from Industry and leverage disruptive technologies to achieve real-time, highly automated treasury processes, with data-driven forward-looking decision making.
New Technology Driving Game-Changing Differentiation
In the tech arms race, banks are leveraging emerging technology to launch new value propositions for corporate clients: AI-powered cash forecasting, Blockchain-enabled trade finance consortia, and digital assets for correspondent banking settlement.
Leveraging Technology to get Efficient
Leading banks are using technology to transform their cost structure, lowering the costs to run legacy systems and redesigning processes to eliminate friction. Winners will be those that develop a substantial cost advantage while dominating the customer experience.
The Quickening Pace of Change in Payments
While payment volumes continue to grow exponentially, the rapidly changing payments ecosystem demands that technology keep up. New real-time payment schemes, the changing face of payment market infrastructure, migration to ISO 20022, and cloud-ready platforms are driving new entrants into the payments technology space.
Model Bank Awards
We’ve just closed nominations and had almost 140 nominations of exceptionally high quality. We’ll be assessing them shortly and developing case studies of the winners, culminating in the mid-April publication of roughly two dozen reports from around the globe.
We show a high-level view of 2020’s outlook categorized by type of deliverable. Note that we’ll be publishing Briefing Notes (a new short format based on interesting updates we receive from industry players) throughout the year, but there’s no way to predict what those topics will be.
Industry Trends and Case Studies
- Model Bank case studies from around the world
- Corporate digital channels trends
- Liquidity management
- Cash forecasting
- Blockchain and digital assets
- Artificial intelligence
- Commercial loan origination trends
- Payment trends and technology
- Open Banking and APIs
- Data monetization
- Remote cash capture
- IT spending
- Various Briefing Notes
ABCD and Spectrum reports (Our flagship vendor assessment)
- Corporate digital channel solutions
- Customer onboarding solutions
- Payment services hubs
Contact us for more information about what we have planned in Q1.
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