Go digital, why businesses need a truly digital banking solution

We learned a lot about human behaviour and patterns during the COVID-19 lockdowns. In many ways, this challenging period provided both the impetus and opportunity needed for society to address some of its legacy practices and accelerate the pace of change given that almost overnight our lives turned digital. With an impressive 8% uptick of personal current accounts now held with a digital “challenger” bank, 40% of UK online adults are now considering banking with a provider that does not have any branches.

Digital, the new normal

During the global pandemic, the adaptability and resourcefulness of our populace was on full display. We were all forced to adapt our routines, our way of working and even developed new business models to cater for ‘the new normal’. Restaurant and bakery businesses began offering home deliveries to ensure their survival, menus became scannable QR codes, music festivals moved online, and office workers embraced flexibility homeworking.

The most notable among these disruptive changes in the financial services sector has been the digitisation of the banking sector, which has evolved at an unprecedented rate since 2020 and shows little sign of slowing down. This innovation was driven by necessity, as bank branches closed due to lockdowns, and consumers were forced to bank online to manage their finances. Banks had to swiftly advance their offerings to cater to the increase in digital footfall, forming new partnerships with third-party providers to facilitate an enhanced range of online functions and solutions.

While perhaps reactive in its origins, this rapid improvement in retail online banking resource has served to futureproof banks ahead of the challenges to market share that have emerged from new market entrants, such as Monzo, Revolut and Starling Bank. Competition has always been fierce in the banking sector with consolidation, international expansion and the need to target services to increasing niche markets top of mind to stay ahead. So, although the move towards digitisation had long been forecast, its arrival was forcibly accelerated due to circumstance. Now that retail banks and consumers alike have adapted to this change, we anticipate a similar focus to soon be applied to the Corporate Banking for Institutional client space. Banks have traditionally been far slower to evolve due to the constraints of antiquated systems and creaking infrastructure.

Embracing digital innovation

For corporate SPVs and family offices, digital banking solutions have not kept pace with that of their personal accounts. Having been forced to adapt throughout the pandemic, 90% of corporates and asset managers are interested in engaging with a truly secure digital banking platform that mirrors the convenience of retail banking. Furthermore, 60% are willing to switch to a bank offering client centric digital capabilities with core day to day banking functionalities.

Timelines and expectations

While not an exhaustive list, several of these are common challenges faced by corporates. To address these, banks will need to work alongside third-party providers within tech and fintech (more specifically) to create a more sophisticated product for their corporate customers. Services need to be simple and efficient allowing customers to open accounts and manage their day-to-day transactions, including multi-currency global payments, accessed through a single online and mobile-ready dashboard.

The likes of blockchain and distributed ledger technology will become more widely adopted within the space, allowing for the removal of authentication and an increase in functionality for financial transactions.

Personalised service remains key

Similarly, artificial intelligence may provide banks with greater levels of security, in conjunction with internal software, allow digital banking platforms to leverage the personalised experiences that many technology firms afforded consumers during the pandemic.

Now is the time for nimble corporate banks to capitalise on institutional clients, who in 2022, will be looking for alternative providers that not only meet their expectations, in terms of experience and products or services offered, but who are also leveraging innovative approaches to provide data, analytics and decision-making tools that increase efficiencies and help to drive growth.

Cloud-based corporate solutions

Having made positive strides in digital banking for individuals, the time has come for banks to shift their focus onto corporate clients. For those in the space able to be nimble and willing to embrace technology, there is a significant opportunity to, once again, address this urgent need through innovation and a cloud-based solution, which allows customers to view and instantly access their accounts 24/7, wherever they are in the world.

At Apex Group, we have developed our own digital bank that seeks to address many of the issues experienced by those using corporate bank accounts and provides an experience more suitable for the needs of businesses in a post-pandemic world.