Banks need to address the challenges presented by disrupter,s and meet changing corporate expectations, to remain ahead of their digital competitors, according to the World Payments Report.
The Capgemini World Payments Report states that transaction banks are facing increasingly ambitious corporate demands for digitisation, including the centralisation of services, interest income and FX services. In order to maintain a leading edge over fintechs, the World Payments Report suggests that banks need to ‘improve digital maturity to meet corporate expectations.’
‘Corporate demand for digital products and services are not the only challenges facing transaction banks,’ the report stated.
‘Fintechs are also putting pressure on transaction banking operations; 70 per cent of payments industry executives …believe fintechs pose a key challenge for banks.’
Data collected by Capgemini in the report shows that centralisation of account management is the highest corporate expectation of banks, at 54.6 per cent. This is followed by optimisation of operations, (50 per cent), customer-focused analytics-driven solutions, (35.7 per cent), fraud prevention, (32.1 per cent) and user-friendly interface services at 28.6 per cent.
‘Centralisation of account management services ranks as the top corporate expectation,’ the World Payments Report stated.
‘It is attractive to corporates because that can improve return on cash positions and gain more control of their cash flows.’
According to the report, corporates are boosting their efforts in centralisation with in-house banking and shared service centres to improve optimisation of banking transaction operations.
‘The implication for banks is that revenue from the transaction banking increasingly will be linked to the value-added offerings provided to corporates, while profitability will be linked to internal efficiency of operations,’ it stated.
While banks seek to harness analytics to deliver customer-centric services, fintechs are hedging a lead with technologically superior offerings. Banks however, main retain an edge by working off established trust bases with customers.