SWIFT and the Boston Consulting Group have issued a report of the current state of play in corporate banking in India. The report, titled 'Unlocking Success in Corporate Banking through Digital' highlights findings on the benefits of digital integration.
Corporate banks in India face shrinking lending margins, increasing cyberattacks, digitally disruptive fintechs and tech-savvy customers. The report suggests that corporate banks must look at diversifying their portfolio while securing their data and revamping their operating models to stay relevant. To thrive in this environment, corporate banks need to leverage the currency of big data with advanced analytics.
The report includes three main suggestions as to how corporate banks can take this approach. Firstly, by developing productised solutions for clients across priority sectors, banks can diversify their portfolio, combat sector volatility and boost their fee income. The sector solutions can range from dynamic working capital facility, cash management, trade, FX hedging solutions, to advisory services. The report says it is imperative for corporate banks to create a cross-functional team like a Sector Solutions Group that works in agile squads with operations, risk and IT. Leading Asian banks have already made rapid strides in creating sector-specific solutions and have demonstrated tangible impact and delivered client value.
Secondly, the report suggests that banks can achieve operational excellence by digitising their front-end channels (by developing digital relationship management tools) and their back-office processes (end-to-end customer journey digitisation). Further, public and private institutions are taking concerted initiatives to reduce the industry's operating costs and risk through interventions like SWIFT gpi and digitisation of cross-border trade. Corporate banks, therefore, ultimately stand to reap the benefits of a leaner cost structure translating to real bottom-line impact.
Finally, the report says that Indian corporate banks can leverage big data and advanced analytics to transform their top line through a mix of pricing, selling and retention algorithms. By crawling the vast trove of historic customer and transaction data with AI engines and machine learning algorithms, banks can churn out high quality leads and also establish linkages with existing clientele. By seamlessly flowing this intelligence to the relationship manager through user- friendly interfaces and a robust feedback mechanism, banks stand to strengthen the advisory role of relationship managers, improve conversions and ultimately augment their fee income.
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