Having migrated to digital banking in their personal lives, people in charge of banking arrangements within businesses such as asset management groups see no reason why they should not enjoy the same transition in their corporate lives. They would like to do digital corporate banking, but with no loss of the customised service that many companies require.
Yet the transition to digital banking, whether driven by longer-established players or challengers, is taking longer in the corporate space. There are fewer equivalents of the ‘challenger’ retail bank in the corporate space. In fairness to the providers, we should acknowledge that corporate banking is far more complex than retail banking, for a variety of reasons, including the onboarding requirements, size of the transactions, the number of functions and different currencies and countries that may be involved.
For a long time, corporate banking has been seen, rightly or wrongly, as driven by personal relationships. This is often part of a higher-cost model. Some clients may fear change, worried that a digital transition would inevitably result in a loss of customisability, and so have been willing to bear the additional cost.
They have also had a poor overall banking experience, such as taking between 3 to 4 months to onboard corporate banking customers and open the bank account. Many report they have undergone a poor Know Your Client (KYC) experience, for example, repeatedly being asked to provide information they have already given, which can be frustrating and time consuming.
Mounting pressure
The pressure is mounting from at least some clients to make digital banking available, at least as an option. For traditional banks, the main issue standing in the way of progress is outdated legacy technology. This is just not a matter of a simple update. Layer upon layer of legacy technology, spanning across numerous functions and business lines is entangled, and has needed buy-in from a multitude of stakeholders.