Investment in Corporate Banking Digital Channels: Are we There Yet?

Celent research into 2022 corporate banking priorities showed digital banking platforms and digital channels were the top two priorities for product investment. IT Strategy in Corporate Banking, 2022: Accelerating Away from the Pandemic (June 2022).

As we come toward the end of Q3 2022, corporate banking strategy and product groups are finalizing business cases and prioritizing initiatives for 2023. As budgets are set there will inevitably be a review of how well the organization delivered on 2022 investments. A commonly recurring refrain is, “Didn’t we already spend $X million in the last three years on this initiative?” To use a stereotyped question from young children enduring a long car journey, “Are we there yet?” The answer is often “yes” followed by “no.”

What seems relentless is the need to keep investing in solutions and experiences that help clients manage their treasury operations more effectively and improve the servicing experience. In an ever more competitive environment, such investments are never “one and done” initiatives, and nor should they be. Competitive differentiation is a battle, and the ongoing renewal of digital channels remains a key weapon.

Drive more digital interactions? A bank needs to develop broad and deep, high-value, online and mobile experiences and solutions.

Aspirations of AI? A bank needs constant investment in the basics of data management and engineering of data platforms.

Materially reduce service costs? A bank needs to invest in self-service tools and “help” capabilities embedded in digital channels.

Explore new business models? A bank needs a flexible API platform and developer portal offering before banking as a service (BaaS) and embedded finance partnerships can be developed.

Core, ongoing investments in data, analytics, and API microservices underpin all of the above, and the following Celent reports provide guidance in these areas.

Navigating to Value with Corporate Banking Data: Recommendations for Managing Data Strategies (August 2022)

API-based Corporate-to-Bank Connectivity: The Connective Tissue Enabling Real-Time Treasury and Payments (June 2022)

Inevitably, as investments get reprioritized or projects get delayed, there will be discussions about rebalancing funding and scope of the business initiative portfolio. The longer a bank delays or reduces channel investments in key areas, the further behind it will fall, a larger gap to market leaders will open, and it will become more expensive to catch up. Like a high-stakes game of Jenga, clumsily removing a brick from the tower can bring the delivery plan crashing down.

Hopefully 2022 product commitments are on track and the investment goals will be met. If so, this is no time to rest on one’s laurels because client expectations and the competition don’t stop pushing forward. If progress is slipping, then perhaps a simplification is needed to break each major initiative into more achievable building blocks. Product managers must keep delivering on commitments to justify the essential recurring investment. Each milestone should stand alone and add value, yet also be the foundation for the next building block.