Andy Schmidt

Andy Schmidt

Vice-President & Global Industry Lead for Banking

Among all banking sectors, we see the lowest levels of digital maturity and results within the corporate and transaction banking sector, according to the 2019 CGI Client Global Insights findings. Despite significant digital investment, corporate and transaction banks are behind on their digital journey due to the lower (and slower) impact of digital transformation on traditional corporate banking products, as well as challenges in figuring out how to run their business better through effective data usage and digitization.

However, many leading corporate and transaction banks see this as a competitive opportunity instead of an obstacle because customers have begun to expect digital products and services analogous to those offered by retail banks. In response, these leaders are actively considering the introduction of multiple new competitive digital channels. In addition, they are exploring how to use data better, especially in terms of predictive analytics, as well as digitizing more business processes.

CGI had face-to-face, in-depth interviews with 62 business and technology executives in corporate and transaction banking to understand their top trends and priorities, and how they are working to address their digital challenges. In this blog, I cover some of the key highlights of as these banks seek to execute their strategies and plans for 2020.

Compliance, security, and “real time” are dominant trends

“Mounting and evolving regulation and security standards” remains the most impactful industry trend in 2019—as it was in 2018—for the corporate and transaction banking executives we interviewed, followed by “industry standards, real-time payments and payment regulations.” Regulatory compliance and security remain top of mind because any compliance or security lapses can have a devastating business impact. Trust is the cornerstone of all banking and, without it, particularly in a virtual and digital world, a bank’s customers can and will look elsewhere.

“Real-time platforms” emerges as a new trend, which we believe reflects the impact of real-time payments on the industry. While customers increasingly want real-time, 24x7 services, most do not operate in real time nor are they open at all hours. However, the rise in real-time payments is opening the door to the real-time delivery of other corporate and transaction banking products and services such as trade finance and liquidity management.

Data and digitization top list of priorities

“Harnessing data insights to protect the bank and drive revenue growth” tops the list of corporate and transaction banks’ business priorities, displacing last year’s top priority of implementing a client-centric operating model. On the IT side, executives cite the need to “digitize and automate business processes” as their most important IT priority, a priority that was sixth in importance in 2018.

Fierce market competition from across the banking ecosystem is driving investment in data insights and business process digitization to meet customer demand for more retail-type bank offerings. In our view, this increasing customer centricity is a response not only to the threat of competition, but also to better-understood customer expectations, enabled by the use of analytics. In recent years, without such motivators, corporate banks have been in a digital limbo, waiting for clarity in terms of what customers really want. Now that customer demand is clearer—partly defined by the competition—banks in this sector have something to aim for and a destination to reach.

Moving forward into a new era

Overall, corporate and transaction banking executives indicate that their businesses are picking up the pace in using digital strategies and technologies to drive compliance, security and customer centricity, as well as innovation and cost reduction. As executives experience new market disruptions, customer-centric innovation and value-add services will be the next competitive battleground, requiring a holistic, end-to-end digital strategy. At CGI, we recommend banks recommit to their digital agenda and adopt best practices from their retail banking peers by extending ecosystems, becoming agile businesses and offering customer-centric, data-driven products and services fit for the new era.

Learn more about our findings

Our CGI Client Global Insights report for corporate and transaction banking covers many other key topics, including the digital maturity of banks, along with their cloud usage, IT and innovation spending, and progress toward becoming an IT leader in their industry. We also offer a global report, along with reports that cover each of our focused industries. I invite you to request a free copy of our corporate and transaction banking report and to contact me for further discussion.

About this author

Andy Schmidt

Andy Schmidt

Vice-President & Global Industry Lead for Banking

Andy Schmidt is a former banker and industry analyst who helps drive CGI’s strategy across the company’s global financial services vertical. Andy has more than 25 years of experience in guiding financial business and technology decisions. His primary expertise spans current and emerging payment types, ...