Blog by Harel Karni, Product Manager, Surecomp

27 January 2021

The changing landscape of global banking
The retail banking industry began the transition to digital banking about two decades ago, and in recent years we’ve witnessed a whole new standard in consumer banking. In fact, it is probably just as easy now to find an online bank as it is to find a traditional retail bank that offers a fully digital (and mobile) banking experience. Looking beyond the digital features, it seems banks – influenced by fintech challengers – have also changed their relationship with clients; using smarter technology they have increased engagement, become more secure and transparent, providing a more personalized and simplified experience. It’s apparent that banks are working hard to become a trusted partner in the eyes of their customers, rather than just being the place where they keep their money and consume financial instruments.

However, as we know all too well it’s a very different story when it comes to corporate banking – especially in the traditional trade finance arena. Many banks are still taking time to navigate the digital transition and are comfortable providing trade finance services through manual, paper-based processes, at best accessed via a digital interface. They are struggling to understand the complex needs of their customers and offering little added value. From the corporate perspective, their trade finance customer experience is punctuated with friction, inefficiencies and unnecessary cost.

Why is this important?
There are two main reasons why banks should improve their service to corporate clients and focus on advancing the digital experience:
1. Competition – a contingent of new fintech players (previously outside of trade finance), is recognizing the opportunity and looking to disrupting the industry. This poses a significant threat, particularly to banks’ SME customers who are likely to be attracted by start-of-the-art, agile technology at affordable prices, deployed in record time.
2. Customer experience – corporate treasurers are also retail banking clients who are now accustomed to the new standard of consumer banking. No longer satisfied with the old-school approach or willing to compromise on customer service, they expect added value for their business from their banking partners. Valuable insights, technology to improve business performance and a trusted partner with customer success at the centre is what corporates now demand.

These drivers have been further exacerbated by COVID-19, which has highlighted like never before the need for digital, remote-access solutions. As the impact of the pandemic continues to roll on into 2021, the snowball effect continues to accelerate the power of the fintech companies who are providing great new solutions to existing (and new) problems. These solutions are focused on corporate needs, business workflow and user experience, and are aiming to create value in places where the banks are falling short.

So what can banks do?
Let’s start with what the banks can’t do; they can’t stand aside and wait! It will have a short and long-term negative impact on their bottom line. We’ve seen it happening in other industries, and banking is no different. Customer loyalty is something you must earn and maintain with hard work.
There are two (smart and fast) ways to address this challenge:
1. First is to harness the power of these new fintech players; to collaborate and integrate their solutions into bank’s offerings and tools, providing an enhanced experience within the bank’s digital assets. This way, the bank is keeping its customers close, providing them with selected services and added value under its own umbrella of financial services, increasing their satisfaction (and their stickiness) as a result. There are many examples of fintech solutions adding value to both the bank and its customers, such as automation, risk mitigation, connectivity, AML, compliance and more.
2. Second is to collaborate in reverse and to distribute the bank’s services via other channels. Maintaining the bank’s core position in the financial transaction, it can embed new technology as a step in the corporate workflow, improving the overall customer experience. This allows banks to benefit from exposure to new markets and industry segments, expanding the distribution of their financial products.

The best news for banks is that – in today’s open API market – they can apply both strategies to easily collaborate with fintech companies and introduce new trade finance features or channels in a short time to market. The leading financial solution providers are opening their doors to the world, allowing a controlled connection and multiple options for collaboration. As a leading dedicated trade finance technology provider ourselves, Surecomp has taken on the challenge of boosting digitization and through our Marketplace, APIsure and SmartLayer initiatives, we enable players from across the ecosystem with a connected platform and solutions to promote collaboration and innovation.