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Z's Corner

Commercial Banking in 2020: Innovation or greater adoption to the brave new world of virtual reality?

2020 started out like any other year and in a span of couple of months, turned into the Year of The Pandemic. COVID-19 made ordinary mundane events that we all took for granted - like going to work, dropping off kids at school, meeting with friends at a restaurant, etc - almost impossible…. and all of the sudden very desirable. Life as we knew it came to a complete and abrupt halt. Instead of innovating, normal citizens spent countless hours trying to figure out how to stay afloat in a sudden economic downturn. Then came the expedited adoption of working from home and the change of habits that aligned with that; whether it was being checked for fever at an entrance to a supermarket or having to wear a mask in public places. Soon it was not only about millions of people and their adjustment to the global pandemic, but about the new abnormal at work. Personal lives and work lives became so intertwined that it was almost impossible to tell where the work life ended, and personal life began. While travel around the world was still painfully slow (who has 5 hours to fly from LA to NYC, anyway?!) and telepathy was but a dream, humans managed to communicate via clumsy handheld devices almost instantaneously. Also interesting, was that citizens of the world, specifically North Americans, stubbornly clung to the idea that they could transform the world while holding onto their dear old beliefs of so-called “work/life balance.”

I wonder what will be said about 2020 in history books. This year, first and foremost, made us reconsider working habits and daily wins. As someone who has spent years observing the commercial banking space and felt that business banking is always playing catch up with the consumer universe, I was excited to see a turning point in 2019. Several traditional banks stepped up and introduced instant payment options to their corporate clients. Many fintechs finally turned their attention to the business banking space and started working on exciting offerings. Open banking, Banking as a Service, Treasury as a Service, APIs, etc., etc.… all of these terms went mainstream. The pandemic, while it did not stop these efforts, certainly created an environment in which businesses and corporations alike are simply trying to survive.

Survival does not always parallel innovation. I would like to argue that 2020 is not the year of innovation. This year is the year of greater adoption to the brave new world of virtual reality. I would also like to argue that adoption to the new normal does not mean letting go of the structure, regulations, security procedures and multifactor authentication. In the current environment, it is easy to give in to the temptation of convenience; and convenience and security do not always go hand in hand. While fraud activity in the corporate space is on the rise, several new payment options expanded from zero initiative to grandfather outdated forms of money exchange. What does that mean for the corporate banking space? It means more funds going to support multiple legacy systems and bigger headaches for corporate relationship bankers. Life certainly does not become easier for corporate practitioners. ACH, wires, RTPs, Zelle for Commercial, P-cards, checks and cash – all are options to send and receive funds and an invitation for fraud, be it hacking or insider threats.

As our history has demonstrated, Americans excel at coming together during the times of crisis. This is one of those perilous times. As a corporate banking community, we need to re-align our priorities. Decide what is more important – a number or quality of options, variety of choices or greater control, product noise or simplified approach to services? Let’s face it – survival while we work long hours, homeschool kids, feed our families all while focusing on the future of the industry is near impossible and cannot be sustained long term. Better and more diverse options for dealing with the current crisis are needed. Let’s figure it out together!

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