Intelligent technology can transform corporate banking

In this article, Roland Bloesch discusses his perspective on how intelligent technologies like AI, IoT, and Bots can transform corporate banking whilst the world of finance is quickly digitalising

The vast scope and speed of evolution in regulation, customer behaviour and technology, coupled with the emergence of new competitors, mean that banks have no choice but to transform themselves in order to adapt and thrive. However, there’s an argument that this is not necessarily a bad thing, as change presents both opportunities and challenges for financial institutions.

After all, the financial services industry is quickly becoming one of the prime enablers of the digital economy. It’s true that businesses and consumers expect digital experiences from their banks that rival those of retailers and other goods and services providers. Even corporate customers are demanding more efficient operations, greater connectivity, and faster delivery of innovative products.

Leading banks, along with FinTechs and challengers, are already stepping up to meet this challenge. In fact, according to a report compiled by PwC, 77% of financial institutions will increase internal efforts to innovate, with many businesses embracing the disruptive nature of FinTech. As a result, all financial institutions recognise that embracing this change offers the best chance of realising new competitive advantages. Bank executives who hesitate may cede their most valuable benefits and even risk the future of their companies.

Challenge the challengers, adopt intelligent banking

It’s clear that corporate banks need to face digital disruption head-on with strategies and technologies that help drive digitalisation.

By embracing the same type of intelligent banking that challenger banks have chosen – advanced technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), and blockchain, to deliver excellent customer experiences that consumers have come to expect – traditional banks can not only compete, but win.

The reasonings as to why traditional banks are best placed to adopt intelligent banking practices used by challengers, regards the notion that they can quickly and effectively accelerate their digital transformation, and can do so without the time or costs of being a first mover.

One company that is a prime example of intelligent banking is PayPal. The company, which supports 7.8 billion payment transactions annually in more than 200 countries around the world, is deploying technology that enables the use of data-driven intelligence across the entire value chain.

By using the solutions to streamline its finance processes, PayPal is increasing data quality and granularity and reducing the time needed to acquire data. A rich analytics layer will substantially automate its finance function – decreasing the number of manual processes, increasing accuracy, and freeing employees to perform more valuable activities.

Technology-driven process value

One essential part of the transformation journey is the adoption of intelligent technologies that can help optimise and extend business processes. Using IoT, AI, ML, blockchain, and advanced analytics, banks can transform into event-driven businesses that automate repetitive tasks and enable employees to focus on higher-value responsibilities. They can also invent new business models and revenue streams by monetising data-driven capabilities and applying core competencies in new ways.

Lloyds Banking Group, a leading UK-based financial services organisation, is a case-in-point of an institution that is pursuing digital transformation. Using intelligent technologies, the firm is a leader in cash management and payments processes for corporate and institutional clients.

Lloyds is focusing on customer experience by developing sophisticated self-service features that use complex data analytics and cloud-based solutions. An API-first platform will help clients embrace opportunities emerging through open banking and transparent connectivity across a core digital platform accelerates the payments process.

Intelligent technologies can help other banks to optimise commercial banking practices.

Here are some examples:

1. Service ticket intelligence solutions

Service ticket intelligence solutions can use ML technology to efficiently process inbound social media posts, emails, and other channel interactions. These solutions can also automatically determine classifications, routing, and responses.

2. Customer retention solutions

Customer retention solutions can help banks anticipate customer behaviours, such as account closures and credit card cancellations, with instant insight into transactional data and digital interaction points.

3. Conversational customer experience bots

Bots can provide a humanised way for customers to interact with the bank, improving satisfaction. Chatbots have rapidly become the norm for customers to interact with, a form of AI which evolves and gets smarter.

4. Predictive and deep analytics tools

These tools can gain insight from structured and unstructured data, helping banks anticipate customer behaviour, respond to their needs, and predict the next-best step or product offer.

5. Reconciliation automates manual tasks

Doing this can reduce error rates, costs, and processing time.

More intelligent, seamless connectivity between banks and corporate clients
The future of banking will not be a continuation of the past as new technologies will transform banking as we know it.

And while the digital financial services landscape is changing fast, facing increased pressure from customers and competitors, there is no doubt that intelligent technologies must be embraced to drive value for banks in the next-generation economy.

By embedding automation into business processes, supporting massive connectivity, connecting the IoT, ML, and AI, and enabling data-driven insights from advanced analytics, banks can help meet the challenges of a dynamic industry.

Sometimes change is hard. But for commercial banks, there’s no question that it’s incredibly valuable.

Are you ready to embrace the benefits of intelligent technologies?

Roland Bloesch

Vice President and Global Head of Regulated Industries 

SAP Customer Experience