Finastra’s Research Reveals Shifting Priorities for Corporate Banks by 2025by Fintech News Singapore March 3, 2021
Finastra, a financial services software and cloud solutions provider, revealed changing priorities for corporate banks in APAC and their customers over the next five years during its flagship virtual event Finastra Universe.
Finastra’s research showed 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.
The research, which gauged the views of over 700 heads of relationship, technology and product across global corporate banks, shows how their priorities are changing over the next five years in line with their corporate clients’ requirements.
Their responses showed that corporates will prioritise 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.
Finastra’s research indicated that appetite for change exists as digital transformation budgets within these organisations are expected to increase by 2025.
In areas of cash management and trade finance, banks expect digital development budgets to grow by around 43% and 40% respectively. Meanwhile, in the lending sector, banks expect digital development budgets to increase by nearly a quarter (24%).
The research also revealed that 83% of respondents in APAC are already working with fintechs or will be in the next year.
As relationship management falls in priority, corporate banks in APAC are changing their focus where cloud technology and digital signature are the main tools that banks need as soon as possible.
Around 23% of banks said that cloud is needed for their response to COVID-19, but that they don’t currently have access to this technology across cash management, lending and trade finance.
Additionally, digital signature was also cited as a requirement, but 17% of banks do not currently have access to this. More than three quarters (77%) of lenders said that account validation was a key digitisation priority too.
Torsten Pull, SVP & General Manager for Corporate Banking at Finastra said,
“The need to deliver faster, more agile and more tailored corporate finance solutions across sectors is driving corporate banks to embark on a digital transformation journey. The agility and expertise of fintech partners will be essential, as will collaboration via open platforms.
As these trends ramp up, our research shows that, globally, around 70%-75% of banks are already working with fintech partners, or plan to do so in the next year. It’s a change to be embraced which will help to accelerate growth.”