Although much has changed in the banking industry years after the advent of the digital revolution, the conservative approach of many financial institutions has made it so that their current technological infrastructure now serves as a barrier to their being able to break through the next stage of their digital evolution.
The insistence on traditional methods and in the maintenance of legacy core systems has led to relatively minute improvements in banking services, even those that relate to the corporate side of banking. Consequently, many corporate clients have found themselves reevaluating their relationships with banks.
Because of this, however, many financial institutions are now considering whether a shift toward deep-tech innovations in corporate banking is worth it.
This would essentially require letting go of much of one’s legacy tech-stack and transitioning operations into enterprise-class digital platforms and solutions, especially those that are based on the cloud.
While this is a heavy decision to make, banks should nevertheless consider the following practical applications of deep tech, and make use of such applications in their corporate banking processes.
1. Optimizing Cash Management
By far a core function in corporate banking, cash management is a very practical necessity, and how a bank manages this for clients can make or break a business relationship.
Corporates put a lot of trust in their banking partners when handling their funds, but the reliance on traditional, paper-trail processes has grown far too inconvenient and time-consuming for both parties.
Deep-tech innovations have offered direct solutions to some of the primary complaints that corporates have with regard to their banks’ cash management system.
Adopting deep-tech would allow partners first of all, to view their account balance and liquidity in real-time whenever they wish, and dashboards on these digital platforms provide easy access to this information at a glance.
Furthermore, the transition to an all-digital system would help with processing transactions much more efficiently. What would usually take a week with physical copy payables and receivables could, for example, take just a single day to be processed with the help of a deep-tech solution, and any issues and concerns could be addressed easily by the bank through online and digitized correspondence and action.
2. Simplifying Credit and Loan Services
Before starting any ventures and projects, companies often require credit and loan services from their banks for the necessary funding. Usually, this means applying for these loans and negotiating credit proposals.
The problem is that processing these matters tends to take a significant amount of time, and corporates have to account for this in their timelines.
Ideally, they would rather have these processed sooner, or at the very least, they would like to track the process to keep themselves updated. This can be very difficult for banks that are rummaging through the paperwork as well as utilizing archaic software for their operations.
Integrating deep-tech into a credit and loan systems could streamline the entire process for effective management of applications and proposals while reducing processing time significantly.
Furthermore, the reliance on more advanced banking technology means that banks can offer greater transparency on these procedures to their corporate partners.
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3. Centralizing Trade and Supply Operations
While this is related to cash management, this has more to do with how company finances move between different partnered corporate entities. This has more to do with how revenue from sales makes its way back to suppliers and the company itself.
Normally, this can be a long and tedious process due to the numerous invoices, payables, and receivables that have to be processed between each entity going back and forth.
Banks can either add to the complexities of this process by insisting on further bureaucracies, or they can utilize deep-tech to improve on these operations.
What deep-tech in banking can do is to digitally centralize all of these procedures and communications. This will reduce the time and effort demanded from corporates to address their supply chain entities individually, and they can track progress and invoices a lot more easily and in a more accessible manner.
4. Improving Treasury Management
Arguably, the most complex service demanded in corporate banking is treasury management as corporates tend to hold multiple accounts in banks.
Conversion rates, time zones, and varying interest rates can make for a heavy task that would take too much time and resources for companies to handle themselves.
That is why they rely on their banks to play a big role in managing their treasury locally and even internationally. However, traditional and legacy protocols could extend and complicate these treasury operations, leading to negligible gains if corporates had managed their own treasury operations.
Companies follow strict timelines, and they value efficiency over everything. Deep-tech in this case would allow banks to simplify these procedures and data processing for their corporate partners who, in turn, would be able to access all of this more easily. Other than saving time, corporates will be able to track any complications conveniently across all their accounts.
These practical benefits and improvements that result from integrating deep-tech into corporate banking may be very enticing.
Understandably, banks may still remain hesitant due to the gravity and scale of changes that would have to come, should they decide to do so. It may indeed take quite some time, and it may also interfere with regular operations during this transition period.
However, financial institutions should consider the positive outcomes that would result from these changes, particularly with respect to their relationships with corporate partners.
Furthermore, this amenability to change and improvement would be attractive to potential companies who may be swayed to shift toward a forward-thinking banking partner that has actually already adopted deep-tech technologies.