Listen: Finastra survey shows corporate banks expanding along three paths

Corporate banks will strive to become “platform players” in the next four years, a shift that will fundamentally be driven by automation. A platform player is a bank that offers a full ecosystem of third-party products and services to clients; this is one of three paths most commercial banks are pursuing, according to Tim Tyler, a senior principal in solutions consulting with financial software provider Finastra. In this podcast, Tyler discusses his hypothesis with Bank Automation News , one based upon a recent Finastra survey of 700 senior managers at corporate and business banks. Being product providers and relationship managers are the other two paths banks are following, Tyler says. The former will require banks "doing something very well, at scale, but probably low margin,” and the latter will require data and integration, both internally and externally. All three paths will require high levels of automation, particularly through integration with APIs. “Whichever pillar you look at, automation is going to be a fundamental driver in being able to deliver it in a profitable, meaningful way,” Tyler adds. He also discusses where corporate lending, trade finance, and cash and liquidity management stand in terms of automation. 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 . The following is a transcript generated by AI technology that has been lightly edited but still contains errors Loraine Lawson Good day. This is Loraine Lawson, associate editor with Bank Automation News. The fintech Finastra last week issued a report — Beyond the traditional relationship model -- that queried 700 senior managers at corporate banks about their priorities through 2025. Based on those conversations, the report predicts corporate banks will focus on becoming a platform player. I asked Tim Tyler, a senior principal in solutions consulting with the fintech, what it will mean to be a platform player and what role automation will play in bank’s transformation.Tim Tyler Absolutely. So we believe that there's a dynamic shift in business and corporate banking where banks are looking to become one of or a combination but three pillars of corporate banking, one of which is being a product provider, and product provider. Doing something very well, at scale, but probably low margin. And how do you do that? Well, automation, you know, if you want to, if you want to do something at scale, you've got to keep one on top of your operating costs to deliver. And the only way you can do that is through automating as much of the process as possible. The second pillar is around relationship management. And that's very data driven. Now that data and insight comes from the integration that you have, both internally within the bank, and the external integration with your clients. And, again, you know, you want that as timely as possible. So that other aspects of real time data means you've got to automate that connectivity, you've got to work to make that data collection. And then the final pillar is the platform player. And a platform play is a bank that wants to either offer other entities services, so it'll package third parties, products and services to its client base, or indeed, it will build its own ecosystem that it wants people to join. But again, that then leads as a platform player, it's very API intensive. And it's API intensive, because you need that interconnectivity on an automated basis. So whichever pillar you look at, automation is going to be a fundamental driver in being able to deliver it in a profitable, meaningful way.Loraine Lawson And your report looked at where they would be bad 2025. Where do you think we'll be in say, two years with this?Tim Tyler In two years, this, I think, as I said, earlier, banks are on the journey. You know, certainly banks that I talked to have a strong bent toward the platform player angle, they recognize that ecosystem is important, and that the ecosystems that platforms become ever more important. And again, how do you build that interconnectivity, and that's where a platform such as our financial fusion fabric cloud, comes into play, because it enables that interconnectivity between the different entities that might be involved. So that might be another bank, it might be another field set, it might be another corporate of some sort, or interplaying, with each other, in that environment. So home the journey, again, some a much more advanced than others, some are, you know, thinking about it. And this also depends upon the line of business within the bank. So I think we see that there's a percentage of lending within the bank corporate lending, which is probably behind the curve. Whereas if you look at trade finance, and if you look at cash and liquidity management, they're probably a lot more progressed. So further on, like, Where will we actually be in 10 years time, and definitely further along the curve? How far look at a year ago, who would have thought that we'd be in a position where the digitalization of banking process have accelerated quite as much as we've actually seen it? Now, nothing. Nothing and I've got a phrase in my mind, I'm trying to place it is nothing makes you move quite so fast as necessity. You know, it's you would have been out of business if you didn't move to a more digitalized distributed way working. Now, assuming a return to normality, I think they fuse has been lit. So, you know, we will continue at a pace down this route. I think that, you know, the cost benefits are clear. It's just a matter of banks, really, those banks that haven't stuck their heads above the precipice. I've seen all of them Colleagues doing so and a wonder, you know, it's a bit like in certain countries, people will see a queue and will join the queue. But they don't know what the queues for but they'll join the queue. I think the realization now is add, that's what they're queuing for. It's not that I can I choose to join the queue? I have to, because Have I done fundamentally, I'll lose my business. And I think that's what the imperative is, the imperative is, if you want to remain in the game, you can choose, you know, do you want to become a product provider, or relationship builder or a platform player, but you've got to be moving. I'm a strong believer in that. If you're worried about tomorrow, you're too late. You've got to be worried about three years time, and you've got to be steering your ship. It doesn't matter if you make some long steps on your journey. You know, that's, that's the nature of being agile, being nimble, it's, you know, fail fast change course. Correct. But you've got to be on the journey. And I think, so within two years, I think all banks will be on the journey, some will be a lot further towards the destination than others.Loraine Lawson Okay, were there any questions? I should have asked him additional, additional question after that.Tim Tyler Any questions you should ask? I don't think so. I think, you know, it's how does finastra outside of like that report? How are we talking to report about helping banks on their digital journey? You know, I think for us, its channel is key. It's the back office integration. For me, it's automating. So I mentioned front to back and front to back squared, I think the horizontal is as important is the vertical. So it's automating across the bank, as well as just within the line of business. So, you know, it's Yes, you can get a payment from the customer, to the beneficiary, in a different country. But you've also then got to do KYC, you've got to do anti-money laundering checks, you've got to do risk checks, you've got to do anti-fraud, you've got to traverse the breadth of the bank as well as the vertical. And I think it's the same, that's huge and public cloud can really play a part in helping banks integrate into that ecosystem to be able to do all of that in a seamless manner.

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Automation will be key to their success

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