The digital revolution is reshaping banking on all fronts – banks are adapting as best they can in order to maintain a competitive edge. Recently, we asked Pavan Nagori from Barclays, one of the speakers at our BankInno conference in Barcelona, taking place on 23 - 24 March 2017, about the process of implementing banking innovation in the last decade, as well as the current state of things.
1. How would you describe the beginnings of the digital/electronic revolution in the banking field?
Digital and electronic banking is not new to corporate banking, as it has been around for more than 30 years. Corporate banking was an early adopter of electronic/digital solutions in the form of SWIFT and EB systems with Trade and Cash Management. However, these early solutions were designed only with a focus on the functional, and with little or no consideration for the operational user experience. Typically, these solutions required software to be locally installed on the computer. The corporate banking industry focused on EB solutions, then tapered down and remained stagnant in the 90s as the banks focused on costs and remediation of their EB solutions from installed applications to online/browser based products.
2. Those were the starting points. What were the more recent developments in the field of banking innovation?
This century has brought about a different type of revolution: a personal digital revolution which took over in the 2010s, and started with the launch of first iPhone in 2007, as other smartphones followed soon after. A decade later, the corporate banking world was facing a challenge: how to make their corporate banking solutions relevant and user-friendly, not just to firms, but the people in the organisations using them. These customers were expecting and demanding the same user experience they were used to in their personal lives with corporate solutions. The senior decision-makers in the firms were also focusing on these aspects in order to reduce costs and keep their employees happy, and, moreover, because there was very little else to differentiate between banks in terms of functionality.
The other big evolution in digital space for corporate banking comes with the plateauing of the functionality build. The space is open to explore, improving cross platform/cross product views for the treasurers and bringing the corporate banking products and services together in a more cohesive, interactive form. This will pave the way for cross-selling opportunities in the future. This direction is quite evident when we take a look at the way the development of corporate portals across the banking industry is being pushed.
To summarize, the digital focus in banks (in the client-facing area) is aimed at
1) Improving the user experience
2) Enhancing interaction between the products and services to form a holistic view for the treasurers and decision makers
3) Enhancing online/digital interaction with clients with a view, building a digital relationship in the corporate world to complement the personal relationship model
3. What are the sources of inspiration for you when developing a new product in the current state of the industry?
Mainly the clients, and the broader digital transformation in general. We have now reached a level wherein the core offering is available and, hence, any new product must be client-driven to ensure that there is a sufficient business case for it. Technically speaking, it is still very much about benefit analysis in the corporate banking space – these benefits may be financial or non-financial.