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Transitions and Transaction Banking
Transaction Banking is a suite of uniformed products that comprise the key corporate needs for working capital optimization. That suite of products is made up of a designed for corporate solution that integrates Cash, Trade, FX and Payments.
Transaction banking convergence is a challenge as the industry struggles with legacy applications, limited resources, internal cooperation difficulties and of course, funding. The corporate CFOs are challenged with a never ending quest of optimizing their capital and are focused on positive financial impacts. They are driving banks to provide a transaction banking suite which provide greater benefit. The current approach of separate silos inside the bank no longer works, and vendors have been part of the problem not the remedy.
Can banks and vendors deliver on the promise or do they stay true to their distinctive silo differences? How can banks and vendors provide a seamless financial solution that deliver’s corporate benefits and profits? It will take a cooperative realization to make the shifts in approach that is needed to reap rewards for all. For bankers, their transactional base and experience needs to be combined with a corporates’ CFO working capital thought process for optimizing the overall corporate portfolio. Corporations need to go from being able to just initiate a transaction to an end-to-end real-time view all in a single place.
The work starts with a single access point for the corporate to view, track, initiate and complete the transaction at hand – a secure portal with a working capital dashboard designed to deliver a user-friendly experience that will make a total corporate view easy. This supplies the “show,” and now to the “go”. The following points explain how working capital integration can give corporations needed benefits.
The call is for vendors to step up to the challenge that the corporations have put to the banks in order to deliver a corporate transaction banking solution. The delivery of a full range of bank products to the small to medium size enterprises (SME) is a difficulty that needs to be overcome. Banks need to find effective ways of servicing the SME companies that their large clients depend on to provide and consume their goods and services as part of the supply chain. For the large corporations the challenge is to have multi-bank access to enable a consolidated single view of every bank that is part of their corporate relationship.
For vendors it is quite simple; build what corporates need and you will have solutions that banks will buy. Whilst that is easy to say, vendors mostly wear blinders telling themselves that banks are their customers and the bankers will tell us what they think corporates want rather than listening to what the corporates actually need. The majorities of vendors do this and end up with products that their banks top costumers want because those are the clients the banks will pay for vendor development rather than a product that meets the broader market. Vendors choose not to INNOVATE and this way avoids the cost and risk of developing market advances. Every vendor wants to say they are leaders as long as there is no cost to being leaders. Very few vendors will say to the market this is how we will advance the industry and this is how you, Mr. Bank will do things because this is what the market needs functionally and technically.
The challenge for banks is to realign their transaction banking business model from siloed to a unified corporate offering that can lower costs. Using real-time automation and through monetizing the informational gold client data that the bank leads to increasing revenue potential.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Ellison Anne Williams CEO at Enveil
30 October
Damien Dugauquier Co-Founder & CEO at iPiD
Kyrylo Reitor Chief Marketing Officer at International Fintech Business
Prashant Bhardwaj Innovation Manager at Crif
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