The Digital priorities for upgrading Commercial Banking Platforms

Commercial banking platforms are competing with third parties
The digital age is continuously evolving and taking on new forms. Morphing from legacy systems to a fully enabled API offering or a combination thereof, the end game is to offer a best-in-class solution. There are many pieces to the puzzle when building or revamping a platform, whether it’s centered around small business or corporate clients all aspects must be measured.

It takes an army to build a digital platform and a knowledgeable sales unit to sell the value to expand the business. Corporate customers today have high expectations for an exceptionally aligned multi-channel digital experience, that meets needs and forecasts, that are tied to business outcomes.

Financial institutions are not only competing amongst each other in the digital space, but with third-party providers to offer a gold standard solution. With the pandemic fueling changes across corporate digital offerings, innovation teams are looking to FBX, an Informa Financial Intelligence company, for guidance to understand the environment and what can be done to stay ahead. If the budget is tight, there are key aspects to consider that are taking the spotlight with digital teams.

Should you build, buy or integrate?
Whether starting from scratch or enhancing a digital platform, it is surprisingly easier today to build with the right guidance and resources. Thanks to new technology like the cloud and open banking, financial institutions are now able to launch a sophisticated product faster to market and for less.

There are three ways to explore a platform blueprint; build, buy or integrate, this is truly the million-dollar question and center of every strategy. There is not one solid direction, one or a combo of each can fit and be part of a financial institution’s strategy. Considerations include the size of the bank and the development stage of the platform. Key product initiatives may also change the direction depending on which has where focus is applied.

When considering where to start or which products to integrate into a platform first, accessibility into real-time cash forecasting, reporting, onboarding, and payment capabilities take the cake.

Enable data-driven decisions, with real-time reporting
Accessibility in real-time reporting for cash forecasting purposes is a game changer, especially those financial institutions that have the capability to sync 10 or more siloed systems. Constantly funneling data and analytics into one platform for treasurers to access has been crucial, driving powerful actionable data that is housed globally or across the nation back to treasurers. Accessibility to liquidity and Cash flow forecasting is key to liquidity management, allowing clients to better understand their future working capital and liquidity needs, to budget effectively, and to support efficient reporting.

Bank of America is set to launch this year the newly awaited CashPro Forecasting IQ tool via CashPro Online utilizing machine learning technology to enhance predictions. Moving towards a true real-time system linking internal accounts and those held at other financial institutions. Assistant Erica will be able to tell clients globally if a transaction has been completed in Singapore, there are no limits to what the system can do.

Bank of America’s Erica can present and action Zelle payments

HSBC launched a new cash forecasting tool that covers a three-year window, communicating with internal ERP and in-house systems held at the bank to gather data to provide accurate reporting. Variance reporting is also offered to spot variances in forecast versus performance, a reporting tool U.S. Bank already offers to corporate clients via SinglePoint.

U.S. Bank’s SinglePoint variance reporting cashflow forecasting criteria,
taken from FBX’s Commercial Banking Digital Tracker

Key indicators of commercial platform health
The health of a commercial platform also relies on remote digital account onboarding and servicing, it should be part of a digital strategy. The technology is getting closer as fears and risks are highlighted throughout the finance community but solutions are making headway. Small steps that are making this possible include the capabilities around secure online document centers and e-signatures. BBVA has launched digital account opening in Spain that has the capability to reach millions of businesses and assists those who would like to switch banks as well. FBX analysts expect this service to be widely available in 2021 with other financial institutions jumping on board.

Payment capability will also determine the health of an online platform including tracking a payment from end-to-end. Any form of instant payments should be considered, including same day ACH, Zelle for business, or via the real-time payment rail.

Payment tracking paired with a better user experience has been launching across the globe, not just providing greater visibility into the transaction process and how much will be charged, including bank fees, before confirming and releasing a transaction. This is key for companies that still utilize manual processes or do not have actionable insight.

Whether a corporation decides or the bank, HSBC’s prioritized payments function allows commercial clients to select the best method of a payment for their needs, whether by price or release time (Wire, ACH, real-time, commercial card).

A view of HSBC’s prioritized payments, taken from FBX’s Commercial Banking Digital Tracker

In the case with Bank of America and PNC, the bank decides the method of digital payment that best fits the business’ needs, which has been added into their consolidated payables service.

BNP Paribas launched a feature that provides additional payment support through a payment tracking service via Connexis Cash for cross-border payments, enabling users to see an overview of payment statuses, and assisting client payment decisions. Also providing clients with payment insights including time, routing, charged fees and FX.

BNP Paribas’ payment tracker, as seen in FBX’s Commercial Banking Digital Tracker

Digital roadmaps should be driven by global insight
Finally, global access is key to any digital roadmap. When FBX dives into the digital space, we look at it from a global perspective. Platforms reach beyond borders and one digital platform with multi-bank global access in payments, reporting, and receivables is key. The European market brands are actively focused on upgrading the login and authentication processes, followed by user experience and online support. This is not far off from what the US market is striving for. Many providers have beefed up the online webinar tutorials and enhanced online support features providing instant access to questions without having to hunt for treasury support or bog down call centers.

Outside of authentication and online support, global providers are focused on API driven enhancements, including real-time reporting and access to funds, and payment upgrades including global transactions.

In order to succeed in this arena, it’s important to know where your platform stands against the competition, especially now when digital is moving rapidly into the next phase of design and accessibility. With all these changes and moving parts, corporate clients look to financial institutions for the latest and greatest in financial management tools and reporting.

Automating services, linking multiple systems, and providing access to real-time cash flow insight will guide strategies, investments, and funds. It’s important to understand the pulse of the market, from a domestic and global perspective. Not only from a product offering, but from a strategic standpoint. Understanding which partnerships are being formed between financial institution and third parties in the market or whether a product or new business line is being discussed.

FBX can provide a historical look into what has worked, is working, and where the future of digital banking stands based on market trends, insight, and new features being tested in the market. Regardless of which direction a financial institution chooses, UX and workflow must be considered by treasury professionals, and FBX is uniquely positioned to provide actionable insight and support. With FBX’s Commercial Digital Tracker, we target the top 20 institutions, providing digital and innovation teams post-login access to nine major journeys, supporting commercial teams with powerful and actionable insight across the globe.