The future of banking is invisible, reveals webinar

Absa CIB experts revealed how client-centricity, technology and partnerships are shaping the future of banking.

The role of corporate banks in driving business growth is quickly evolving, and finance teams are looking for banks that make their lives easier, while reducing risk and improving efficiency.

During a Finance Indaba Network webinar on 21 October, Absa Corporate and Investment Banking’s Jay Hanoomaun, Nick Manterfield and Richard Southey unpacked three of the top trends that are defining the future of banking and helping banks meet their client’s evolving needs.

Richard, head of cash management at Absa CIB, explained that the three main trends shaping the future of banking are client-centricity, technology and partnerships.

Client-centricity
Jay, head of client solutions at Absa CIB, said that being client-centric doesn’t end simply with solving clients’ needs. “It requires banks to be proactive around our engagement and to ensure that we understand who our clients are, what drives value and how we can partner to deliver.”

He explained that client demands seem to be shifting rapidly, with clients expecting increasingly bespoke value added services such as seamless connectivity and proactive intelligence. “Corporate treasurers and CFOs are seeking more sophisticated risk management solutions to manage credit, operational and cyber risks.”

He added that data and technology are at the centre of Absa’s ability to deliver on these evolving expectations. Absa, like many other banks, is and are expected to expand the use of blockchain, RPA, AI technologies, and data management in delivering its services.

“Our engagement with CIB clients have started to shift from a product-based approach to a more advisory-based approach, which is analytics-driven and supported by tailored solutions to solve very specific needs,” Jay said.

He explained that, by analysing the data, Absa has realised the traditional approach of “one-size-fits-all” has very limited runway. “Our clients’ needs are changing as the underlying consumer shifts and is driven by the need for instant gratification. We see that clients now want to be pulled in the direction of new ways of working technology, as opposed to being pushed into ‘cookie cut’ solutions.”

The more pronounced use of automation and machine learning in Absa’s client environment is accelerating digital transformation and changes how clients consume products and services. This, Jay explained, places pressure on the bank to innovate. However, Absa welcomes this pressure. “It has allowed us to create strategic partnerships with FinTechs, which allow us to offer our clients exactly what they want, when they want it.”

Strategic partnerships
Richard explained that through partnerships, especially with FinTechs, banks can serve a whole lot of new, different services that speak to the changing demands of clients.

“People always ask me whether FinTechs are taking away the whole game from banks, but I always tell them the real question should be: How can banks partner with FinTechs to be stronger together?” he said.

Through partnerships, banks can:

  • Increase the reach for product distribution through relevant ecosystems.
  • Increase or leverage capability to solve particular customer problems.
  • Reduce risk and improve efficiency through leveraging datasets and technology.
  • Innovation acceleration and exposure.

“We are building ourselves to be a lot more agile than we used to be, and working with partners accelerated that,” Richard said. “In a fast-changing world where more and more clients are looking for customisation, you have to accelerate innovation. You’ll become a dinosaur if you don’t.”

He added that the ability to work with partners who are looking at problems from different perspectives, really helps with that specific innovation.

However, Richard noted that technology plays an important role in making these partnerships effective. “Your technology needs to interact seamlessly with your partners, and we’re starting to see more and more that the real changes in efficiency are through interesting API integrations between organisations.”

Technology as an enabler
Nick, the chief information officer at Absa CIB, then highlighted four biggest customer challenges and problems that Absa is trying to solve with technology:

“We want to move to a world where there is real-time visibility of information moving between systems so that we can make better decisions,” Nick said.

He explained that, for many years, banks have been exchanging files of information with their customers, typically containing statements, payment instructions and more. “This is when a file is generated from a system, put on a server, moved across to another server, is picked up by another system, and then processed.”

Nick added that one of the big shifts technology can help drive is to move from this batch-based paradigm of processing and consuming information, to consulting it on a more real-time basis by, for example, moving from file-based transactions to API-based transactions.

“Banking will become invisible, because our clients will be working through the systems that they’re developing and investing in, and all the banking data, instructions and securities will flow seamlessly into those client systems,” Nick concluded.

What Absa is doing

You can rewatch the webinar here if you missed it.