Technology is vital to success in cash management and across transaction banking. Deutsche Bank Global Transaction Banking’s global head of product management Rhomaios Ram; global head of cash product management and Europe, Middle East and Africa regional head of product management Christian Westerhaus; and head of client access David Watson discuss the challenges and opportunities presented by the rise of technology and the importance of striking the optimal balance between product usability and functionality. 

Transaction banking is a technology game. While technology was once an enabler – a tool to ease internal operations and aid business growth – it has gradually evolved into the backbone of the industry. Certainly, modern cross-border transaction processing and cash management depends on access to sophisticated electronic services designed to increase efficiency and transaction visibility while aiding counterparty communication and connectivity. This has been demonstrated by the rapid rise of the online banking space, which is able to add value with both desktop and mobile technology, and the sharp increase in the Swift environment for corporates and other host-to-host communication models.

This advanced level of functionality has become the minimum requirement. A key requirement is now for the integration of, rather than simply access to, bank-supplied products and services with existing treasury work stations and enterprise resource planning systems. This degree of point-to-point integration would allow banks to become almost an extension of their clients’ business. It is this high level of collaboration and connectivity on which the transaction and cash management industry depends.

This presents banks with a considerable challenge on two fronts. First, achieving such integration requires unprecedented advanced levels of functionality, which comes at significant cost. Second, it requires product agility and flexibility as corporate needs will differ between organisations, business sectors and geographies. This heralds a major change in bank-corporate dynamics.

There is no denying that at one time banking products may not have reflected true corporate needs. The pre-crisis abundance of liquidity meant that bank offerings tended to be commoditised, ‘one-size-fits-all’-style products that were chiefly geared towards the achievement of banks’ sales targets or ensuring return on investment.

With trade entities worldwide now under pressure to maximise available cash resources and decrease dependency on debt, such an approach is no longer viable. Instead, banks must take steps to understand clients’ present and future concerns and innovate accordingly. As clients become increasingly technology-savvy, meeting their complex requirements has become not only a question of capability, but of service delivery and accessibility.

Customisation vs functionality

Deutsche Bank has responded to this three-part need with the development of the Autobahn App Market, launched by the bank’s global markets division at the beginning of 2011.The Autobahn App Market is the first app-based electronic offering for clients in the financial services industry – allowing them to benefit from greatly enhanced treasury functionality as well as trade electronically across multiple asset classes. They can also access Deutsche Bank’s award-winning research commentary and market data – and all from a centralised location.

 An App-based operating model, similar to that of Google’s app market or the iTunes app store, provides a single access point to different bundles of services. The key benefit of such a system from a treasurer’s perspective is that it allows cash and liquidity management products and services to be grouped according to individual company requirements and business cycles – meaning treasurers can select the precise tools they need in a clear and efficient manner.

In this sense, the app market offers ease of use in addition to enhanced functionality. As the corporate world becomes increasingly influenced by technology developments in the consumer space – a prime example being the rising popularity of social media tools – product usability is emerging as a key corporate requirement and differentiator among banking technology providers. Today’s treasury tools, as well as enhancing operational efficiency and improving the transparency of information, reports and records, should be intuitive and easy to use. Consumer products have set a high benchmark in this respect, and it is the challenge of banking technology to keep pace.

One way in which the Autobahn App Market seeks to do this is through offering a degree of customisation and by allowing customer involvement and feedback to shape the development process. Customisation is a hot topic in technology development, but it is not as simple as it first appears. While it is vital that solutions are designed with clients in mind – from access, to functionality, design and data-presentation formats – this cannot be at the expense of underlying system functionality and stability. As a result, customisation is more than a straightforward ‘tick-the-box’ exercise.

Indeed, Deutsche Bank’s endeavours in this field led to the discovery that customisability is only required within limits. Corporates were found to fall into a select number of user personas meaning that, as long as the needs of these user personas can be met, there is simply no need for further customisation capabilities – and it could even prove to be detrimental to the overall health of the system. It is for this reason that Deutsche Bank adopts and advocates a flexible architecture model with respect to solutions development that is based on client input and ongoing feedback. Using the Autobahn App Market as an example, this development model means the solution allows users to group together the services they use in a convenient – and consistent – way, as well as easily search for new services without affecting the underlying functionality, which remains constant. 

Clients lead the way  

Though customisation capability is not without its restrictions, the importance of client input at all stages of the development process cannot be overstated. At base level, this needs to begin with location. Practical requirements differ between financial markets, meaning that banks must ensure their offerings reflect customer needs on a geographic level – needs that will evolve as corporates expand into new markets and establish new trade connections.

Internationalisation is an issue now affecting all banks, non-bank financial institutions and corporates alike, particularly as trade flows shift from West to East and emerging currencies such as Chinese renminbi gain traction as a currency of choice for both intra-Asian trade and Asian trade outside the continent.

On the corporate side, this is manifesting itself in consolidation of the accounts payable and receivable function, which can allow companies to self-fund activities and have tighter control over cash flow and at which place to put together their liquid assets and place short-term deposits and investments.

On the financial institutions side, the growing importance of Asia is leading to  deployment of extended intra-Asia business day processing capabilities to overcome inefficiencies caused by different clearing timezones. In response to this, Deutsche Bank is taking steps to build solutions that meet the increasingly complex payments processing and reporting demands by enhancing the functionality of existing core straight-through processing and clearing capabilities. A key development in this respect is Asia Accelerator, which is designed to address inefficiencies in the settlement of intra-Asia’s high volume of US dollar-denominated payments as a result of different clearing timezones. It allows our financial institution clients to have their intra-Asia dollar payments processed during  the  early hours within the same working day in Asia, leading to tangible efficiency gains that work to the benefit of their own clients. This is a further example of the ways in which the bank is looking to leverage technical capabilities and large-scale effects, network and expertise to address market gaps and burgeoning client concerns.

The user experience

As a leading technology provider, at Deutsche Bank we understand that meeting client needs in a rapidly changing market depends not only on what is delivered, but how it is delivered and how the client relationship is managed during and after the on-boarding process. While it is no great secret that transaction banking and cash management has become a technology-dependent and scale business, few providers – even at a global level – are looking to extend beyond the traditional transaction banking franchise to improve client functionality and bottom line.

At Deutsche Bank we are investing as much – both in terms of time, effort and money – in what we call the user experience as we are in operations. We employ a development centre strategy that seeks to leverage the skill of technology partners – some of which come from outside the traditional transaction banking space – software developers and user experience experts to create flexible products and an agile approach to implementation and customer service. This comprehensive approach to product development is the future of the transaction banking industry, and Deutsche Bank remains committed to innovation in this arena on behalf of its customers and partners across the globe.

 

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