Corporations more likely to talk to banks through APIs

Corporate bodies are three times more likely to primarily communicate with their bank through APIs (Application Programming Interfaces – a form of machine-to-machine communication) versus primarily communicating person-to-person.

Number crunchers at  NTT DATA found a shift in post-pandemic corporate banking towards more integrated, digitised, sustainable banking aligned to the new generation of millennials taking up senior positions in corporate businesses.

The research found that accelerated adoption of technology combined with generational shifts in clients, and the ongoing recovery from a global pandemic has fundamentally changed banking.

The traditional corporate banking image of personal client relationships is confined to history as corporates prioritise end-to-end digitisation and frictionless banking. 85 percent of banks report they are working on rationalising their portals, a change driven by client-centricity and improving the customer experience.

Miguel Mas, Director, Global Corporate Banking explained: “Our research found the future of corporate banking is more integrated, more digitized, and more sustainable. The new regulation is one driver behind the change, but ultimately, it’s a generational shift that’s redefining how banks need to operate.

“We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”

The research found that banks increasingly need to fuse their services with the evolving needs and demands of their customers. More specifically, corporate demand is shifting from traditional trade and working capital products to more structured products. Technology is changing too. Banks are starting to bring in more automation and they are using advanced machine-learning-based models in areas such as credit risk analysis.

There was evidence that banks need to listen to their corporate customers and their specific industry needs to deliver the services they demand. For instance, 70 percent of construction companies report unmet demand for omnichannel corporate cash management and lending solution. Product offerings still sit outside the integrations of their commercial banking platforms.

ESG has become a key consideration for corporate banks. As the world looks to the future, regulators and policy-makers are becoming more vocal about the need for greater adoption of ESG. They recognise that moving towards a low-carbon economy is going to create additional complexities for financial services firms – and increased risk too as companies they service adapt.

Corporates want to bank with a firm that reflects their own views and beliefs as a new generation of corporate banking clients are prioritising the environment and sustainable banking. The study found 48 per cent of corporate respondents wanted their banking provider to invest in more “green” or sustainable products and services. This demand is being met – to an extent. On the banking side, 44% report they are already investing in it.