A recent survey of corporates and corporate banks illustrates that corporate banking has permanently changed.

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NTT Data’s recent survey of almost 900 senior decision-makers at corporates and banks across three regions, published in its Corporate Banking Outlook 2022 report, provides some interesting insights into how the corporate banking sector has changed over the past couple of years.

First, the change in client behaviour that has been seen in retail banking has now permeated the corporate banking world: self-service using tech platforms have replaced face-to-face relationships. According to the survey, three times the number of corporate clients report they want to communicate through application programming interfaces (APIs), compared to those wishing to primarily communicate in-person or via email.

Corporates increasingly choose machine-to-machine communication over personal interactions with their banking account manager, particularly in life sciences, IT and logistics industries. The report says: “There’s an expectation that all their banking requirements can now take place without the requirement to speak to someone, and that more advanced functionality is exposed through API or host-to-host capabilities.”

Second, investment in technology, especially web and mobile platforms, and change-the-bank initiatives is seen as critical today. For example, the need for senior leadership to have a single customer view, as well as the client requirement to have visibility across products and complete integration, is creating a big driver for the rationalisation of multiple portals, according to the report.

The study found that 35% of banks surveyed have already rationalised their portals, while 60% are in the midst of doing so. Only 5% of banks say that it’s not a priority. Of the 12 countries included in the study, Spain was the furthest ahead, with more than 50% of banks having completed their rationalisation programmes. The main reasons for rationalisation were client-centricity, benefits for marketing/sales and cost-savings.

Interestingly, the survey revealed regional differences when it came to which technologies banks are investing in. In Asia-Pacific, lenders are prioritising artificial intelligence investment and robotic process automation compared to the US and Europe, which are most likely to invest in open banking. In Latin America, there is more investment in ensuring data can be viewed and segmented.

Third, sustainability and environmental, social and governance (ESG) considerations are top of mind for banks and corporates alike, spurred on by new regulations in many countries. The report contains several case studies from several industry verticals, including construction, energy, manufacturing and retail, which outlines their sustainability challenges.

While many banks are looking to ESG regulation as a business opportunity that could gain them an edge over competitors, and are building product teams to work on solutions, more work needs to be done, as sustainability is the area where there’s the biggest mismatch in investment expectations between banks and their corporate clients. For example, while 55% of retail corporations are demanding investment into sustainable products and services, the survey found that only 41% of banks are investing into this area.

As the report points out, banks have the opportunity to become the gatekeepers of ESG information, using transactional data from their clients to generate a specific set of ESG key performance indicators (KPIs) per industry and region. Banks could create an ESG benchmark based on these KPIs for each industry and offer clients advice on how to become more sustainable.

Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight

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