Corporate banks are prioritizing online portals, real-time access and execution, and value-added services in a shift that will require investments in automation to achieve.

Corporate banks are moving away from their traditional focus on relationship management to support for digital-based trends, according to a new report this week from financial software provider Finastra “Beyond the traditional relationship model.” The report is based on direct interviews with 700 corporate and business bank senior managers.

Here’s how automation is being prioritized:

Priority 1: Online portals

Online banking is a top priority today and will remain so through 2025, according to Finastra. A distributed workforce, thanks to COVID-19, means most banks are rushing to service customers remotely via portals. However, banks also want to reap the benefits of a digital channel that can automate through the back end and integrate with the customer’s software, Finastra Senior Principal Tim Tyler told Bank Automation News.

Tyler used the example of the payment life cycle, which the customer may initiate from an enterprise resource planning (ERP) software system like QuickBooks, for example. The old way of adding those payments might have been uploaded via a spreadsheet or file transfer, which both require human intervention. An automated system, integrated both within the bank and between the bank and customers, makes that step unnecessary, Tyler said.

The ability “to integrate your own portal as a bank, into the tool of choice that your customers are using, and automating that connection, is key,” Tyler said. “There should be no human intervention whatsoever. It’s gone from corporation to bank to payment network to bank to corporate seamlessly, in a fully automated fashion, and reconciled.”

Priority 2: Real-time access and execution

Real-time access and execution will become the second most important step for corporate banks in the next four years, the report stated. Achieving that goal requires automation, Tyler said. “Whenever you put people in a process, you break that real-time mark, and you can’t have real time and people involved in workflow.”

One area that generally challenges banks is receipt automation, Tyler said, adding the typical success rate of automated reconciliation is between 25% and 60%. “There’s still a lot of work to do to complete and automate that part,” he said.

One reason for this is that it’s still relatively inexpensive to handle reconciliation manually. Tyler said he spoke to one U.K. corporate bank that outsourced reconciliation because it appeared to be cheaper than automating it. The problem with that is it takes longer, therefore reporting the data also takes longer, he said.

“As we move to real time, the time you have to react reduces,” Tyler said. “Automation is key to give you the data and the insights that you need in a timely fashion, which you just don’t get in a manual world.”

Another aspect of banking that Finastra believes will become a real-time process is cross-border payments, a shift that also will require automation.

“The corporate treasurers are now working in an environment where they’re having time constraints put on them,” Tyler said. “They’ve got to be able to reconcile what’s coming in, to be able to understand their position so that they know how they can pay what’s going out. And if those cycles are shortening, manual is not the answer. You have to automate.”

Priorities 3 and 4: Value-added services and a range of products and services

Value-added services will rank as the third most important priority by 2025, and offering a range of product and services will become the fourth top priority in the near future, according to Finastra.

Corporate banks are looking for new ways to make money in today’s low-interest world, where everyone expects payments to be free. Increasingly, the answer will be to add value so banks can charge a greater account service fee or through cross-selling other products to the customer.

These additions will require analytics and automation so banks can make real-time offers, Tyler said. To achieve that, banks will have to leverage artificial intelligence, machine learning, modeling of customer behavior, and forecasting tools.

Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.