Banking & Payments
To become “platforms”, banks need the cloud
A survey by Finastra finds corporate banks increasing budgets for digital transformation across the board.
Research from Finastra shows changing priorities for corporate banks in Asia Pacific and their customers over the next five years.
It reveals that corporate banks are moving away from the traditional “relationship builder” approach of client interaction and management (where they build wider banking relationships with clients to cross-sell additional services) towards being “platform players” that offer value-added services and can deliver real-time execution.
Many banks also see themselves as being “product providers”, which suggests some management teams realize they should focus on a few comparative advantages.
The report says it is banks based in North America that are the most focused on becoming platforms. It doesn’t break down responses by region, but the comment seems to suggest that banks in Asia and Europe are more likely to view their future as product-focused.
There are a number of areas that corporate banks need to address as they continue their digital transformations. The most important of these are regulatory compliance and account validation, as well as risk management.
The research, which surveyed over 700 heads of relationship, technology and product across global corporate banks, shows that corporates will prioritize online banking, value-added services, and real-time service and execution above their banks’ range of products and services and relationship management in the next five years.
In Asia Pacific, the survey finds that:
- Digital transformation budgets are expected to increase by 2025
- For cash management and trade finance, banks expect digital development budgets to grow by around 43% and 40% respectively
- Digital develop budgets for lending will grow but by less, 24%
- 83% of respondents in APAC are already working with fintechs or will be in the next year
The biggest need to achieve digital transformation is cloud adoption. There are many technology aspects but across lending, trade finance and cash management, the core infrastructure of cloud storage and computing ranks as the biggest need.