This piece in The Banker involves a subject that is not typically high profile and therefore not always conceived of as an area of opportunity. However, how corporates connect to the various resources provided by their primary and secondary financial institutions is one of the keys to a strong (or not) treasury relationship, an important constituency to say the least. We have covered this topic generally through platform banking and virtual account member research. According to the author corporate banking entities are waking up to the client experience trend that has gained momentum with the further technology gains that come along with cloud, APIs and new ways of thinking about providing services. How will standardized connectivity impact treasurers?
‘Standardised corporate-to-bank enterprise resource planning (ERP) connectivity could solve many a headache for corporate treasurers. No longer would they have to expend effort and time in tailoring file formats to each bank’s proprietary data structures. Instead, onboarding would become a more streamlined and faster process, and switching banks would be a breeze….While the potential upsides for corporates are clear, the ability to quickly switch could be seen as a threat for banks, who previously thought that a cumbersome process created customer ‘stickiness’ – e.g. customers stuck with their incumbent banking relationship because it was too much of a hassle to start a new one.’
Any time we read secondary research on the topic of treasurers reviewing bank relationships it is clear that although they are typically satisfied, most would like more leverage in potentially moving around relationships, and one of the things preventing such flexibility is the hassle factor. So the author goes on to summarize collaboration between Santander CIB and SAP’s Multi-bank Connectivity (MBC) capability. Standardized connectivity? The end goal is to adapt to the embedded banking capabilities and much greater information sharing potential that modern connectivity tech can provide. Worth a quick browse for those interested.
‘As well as becoming the first EU bank to join SAP MBC, Santander Corporate and Investment Banking (Santander CIB) is now co-innovating with SAP around the concept of invisible banking. “The idea is for corporate users to have our services available whenever they need them. A corporate banking portal (or app) is not enough for us in our digitalisation strategy,” says José Luis Calderón, head of global transaction banking at Santander CIB….“It all begins with our global transaction banking products: from payments to working capital solutions, including supply chain finance, sustainability finance. We will leverage our specific products, expertise, data and analytics to give value-added insights,” he adds….Specifically, the two organisations are looking to create financial tools to help customers navigate supply chain disruptions and accelerate the decarbonisation of their industrial activities. Mr Calderón says that one area that they will be exploring is how to streamline the information exchange for sustainability-related transactions. But he also adds that the “possibilities are endless” when it comes to value-added services that can be created based on better insights into client activities.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.