Opening the world of corporate banking

Connected corporate banking
For most of us, growing up meant we were faced with some major changes. We went from “baby school” to primary school then onto high school and ultimately university. There is a reason that I have mentioned this journey, and it is because during these times we went from having coloring books and an abacus to needing more advanced and complex stationery such as the scientific calculator and protractor.

We, or our parents, realized that with growth came change. Not only were we getting older, but the whole schooling model was changing around us and ultimately, we had to adapt. This needs to be the same approach that banks take with their corporate banking projects, changing with the times and embracing more advanced technology and tools.

Agility is key in unlocking growth
We have now seen that competition for corporate business is intense as corporate treasurers are empowered to make quick decisions and changes – switching their banking partners as well as turning to non-banking providers, as they provide the essential services and products that keep them growing. There are multiple factors that lead to banks needing to switch their strategy and being agile is key.

What is connected corporate banking
Connected corporate banking means unifying major parts of transactional banking in order to achieve multiple benefits, such as increasing new customer acquisition; increasing efficiency; reducing operational risk; reducing system support costs; and many more. A connected corporate bank will have more comprehensive and corporate financial services unifying trade, supply chain, lending, payments and FX hedging.

Becoming the bank of choice is a journey, so let’s begin
You need to enable clients to manage global multi-bank transactions across different time zones and countries. Moreover, you also need to enable a consistent omni-channel experience with centralized control and visibility of a client’s global business. At the same time, regional branches can launch products and services with agility – but there’s more...

Let’s start with trade
In the trade space, you need to allow clients to execute, manage and report on international trade transactions, streamline the processing of letters of credit, guarantees and collections and deliver market-leading Service Level Agreements for the processing of traditional trade transactions. That is what needs to be done, but you may want to know why.  In Africa, it goes back to March 2018 in Kigali when 44 countries signed the African Continental Free Trade Agreement (AfCFTA) which called for increased intra-African trade. Currently, the intra-African trade figure sits at around 16% and will increase to over 25% by 2025. To add to this, boosting intra-African trade will provide great potential for development and will be a key objective for policy makers. It is important to note that 80 – 90% of world trade relies on trade finance (Source: WTO). How can banks cope with this trade modernization and are you taking the right steps towards staying ahead?

Supply chain finance and cash management
When supply chain management is done effectively, it lowers costs and increases profits.
For banks, if you make the process of accessing cash easier and more effective, this will have a great impact on the economy and in turn help build the relationships between countries, businesses and people in totality. How do you make this possible? Make the process simpler by implementing buyer and supplier-centric programs to add value to open account trade with pre-configured workflows for payables and receivables finance. Make sure the system you are using is agile and connected. In terms of cash management, ask yourself: are you delivering access to advanced corporate cash management services online to process cash operations and monitor global account balances and cash forecasting? If not, it’s probably a good place to start as this adds value to you and your clients by allowing them to perform fund transfers, account balances, payments, collections and bulk uploads alongside powerful analytics.

Moving onto liquidity…
Ideally, liquidity is the end goal for most and if we dig deep, probably the top priority of the CFO of any corporate. What are you doing differently to help manage the working capital of your corporates and are you aware of all their risks, how quickly are you gathering the required information, and do you always have real time data on their working capital? What can help here is best in class sweeping, pooling and cash forecasting options which in turn offers the facilities to large corporates to setup and monitor cash.

How can we leave out FX and the treasury?
When they play a key role in the bank, you can’t leave them out. One of the first things I learned moving into the financial industry is that the treasury department is the heart of the bank. In saying this, you need to ask yourself: are you empowering customers with integrated FX spot, swap, forward and loan/deposit requests? With this, corporates can initiate payments, make transfers between accounts and administer their own user roles, workflows, reports and alerts via self-serve capabilities.

Lending and loans
Access to trade, treasury or cash facilities is a challenge for any company. Online lending features can deliver transparency and efficiency to any corporate or SME for loan origination. The customer can inquire in real time but also drawdown funds, reprice loans or setup settlements instructions. Imagine having to do all this manually. It would be a waste of resources and potentially a high possibility for operational risks.

In conclusion, it’s great to have know-how on what can be done. As well as what others are doing, however, this all needs to be unified. The corporate banking landscape faces many challenges but connected technology can support much needed changes in this space. And just like the journey through school, it can help to transform the way things are done.  Need to know more? Feel free to get in touch.