Why do institutions need Digital Banking?
We were recently joined by experts from our fintech partners Currencycloud, Mambu and ComplyAdvantage to discuss why institutional clients such as asset managers, corporate SPVs, trusts and family offices are crying out for Digital Banking solutions.
The wide-ranging roundtable covered the pandemic driven acceleration of demand for digital banking, the pain points currently experienced by institutional clients, and what lies ahead for Digital Banking in 2023.
Although consumers have had access to fast and efficient digital banking services for some time, the same cannot be said for institutional clients. However, this is beginning to change, and institutional and business demand for Digital Banking services is increasing rapidly. Yet, despite this increase in demand, many institutional clients still encounter difficulties when trying to set up bank accounts with legacy banks, which can impact the speed and efficiency of their business. In answer to this increased demand, Apex Group has expanded its Digital Banking offering to provide an agile and responsive banking solution for our institutional clients, delivered by our subsidiary European Depositary Bank (“EDB”).
How has COVID impacted Digital Banking?
COVID-19 saw many changes in multiple business sectors and Digital Banking was no different. One of the most noticeable changes was the shift away from banking being conducted in person. Piers Marais, Product Director at Currencycloud, observed that “there is often a delay in the rate of change that we see between [retail investors and corporate investors]”. However, he believed the pandemic had demonstrated the concept of “trickle up”, as “COVID was an accelerator in the business space”.
While in some ways the pandemic was the “accelerator” for digital banking, Marais adds that it was “built on top of some of the scaffolding, the foundations that had been in place, probably since 2008 onward.”
Nick van Bommel, Market Sales Director at Mambu, echoed this sentiment, saying that his company had witnessed a shift towards “delightful banking” or customer-centred banking. He adds: “At the end of the day, the client expectations are changing…I think there’s actually no other way of dealing with the future, other than having these open environments.”
Solving pain points
Apex Group subsidiary, EDB, aims to help solve some of the pain points that institutional clients typically face when opening new accounts for business entities, SPVs and in their day-to-day business banking. Ankit Shah, Head of Digital Banking at Apex Group, stated “the main challenges can be categorised into two [areas] – the onboarding challenge and the banking challenge”. Regarding the onboarding process, Shah observed that “we can open a retail banking account in 5 minutes but that [isn’t possible] for institutional clients. [However] by using the right technology, we can significantly improve their experience in terms of time and efficiency for account opening.”
Alia Mahmud, Regulatory Affairs Practice Lead at ComplyAdvantage, highlighted that “different customers have different risks,” in the institutional space, requiring enhanced processes around customer due diligence and identification of ownership structures and beneficiaries during the onboarding process. This means that technology is essential to reducing manual and lengthy onboarding processes, and to ensuring accurate and up to date collection of Know Your Customer (“KYC”) information.
Regarding day-to-day banking, Shah outlined how Apex Group’s EDB is ensuring these are delivered for clients in the “most efficient and technologically advanced manner.” He explained that this entails offering a fully digitised, cloud-based, secure platform for clients, with multi-factor authentication.
Digital banking trends in 2023
Comparing institutional Digital Banking to the experience of a retail banking customer, Piers stated “as a consumer, there is no way I’m moving from an iPhone back to a Nokia 3210. This change is permanent, it’s here to stay. People are used to the digital experience in everything else that they’re doing and have started to expect the same experiences within their business environments.”
According to van Bommel, “embedded finance” was one of the “big words” of 2022 and he is “very curious” to see whether doing banking can be made “so seamless, so easy, so that it feels like a very natural process.”
Mahmud also believes the shift towards Digital Banking is here to stay. She stated: “open banking is going to continue to accelerate in 2023. We’ve already seen it in the UK and Europe, [and I can] see it expanding into other jurisdictions… I’m keen on seeing how Open Banking can now be seen in a cross-border fashion”.
How can we help
Our EDB services provide:
- Bank account opening within 5 days of receiving the relevant documents
- Desktop and mobile access 24/7
- Multifactor authentication to enhance security
- Multi-level payment approval to enhance control
- Flexible single / bulk payment capabilities
- Global multi-currency payments and FX
- Fully integrated digital reporting and statements
- Automated money market fund sweeps