Sibos 2015: The future of corporate banking

In a poll that kicked off the Corporate Forum at Sibos, session participants said their top priority for 2016 is working capital and supply chain finance, followed by capital management, securing funding and treasury management systems.

Commenting on these results, Lenovo treasurer Damian Glendinning agreed that there is a huge focus on working capital, despite low funding costs. He noted, though, that corporates focus on working capital when they’re not confident about the future.

Telekom Malaysia Treasurer Mohamad Bin Derwish added that corporate treasurers are shifting toward more strategic roles, especially as automation has reduced their processing responsibilities, so they have more time to look at capital management and improving their balance sheet.

Session moderator David Blair, noting that GE CEO Jeffrey Immelt recently said that industry has yet to see the benefits of the internet in the way the consumer has, then asked whether corporates are starting to get an internet upgrade. Glendinning responded by observing that banking is one of the few industries where consumers get a better customer experience than the treasurer of a Fortune 500 company. Bin Derwish concurred, saying that whereas the B2C space has seen tremendous improvement from smartphones and high speed internet, the corporate space is not so advanced.

One potential danger for banks, Glendinning noted, is that customer-unfriendly processes and regulations that may reach the point where it is too difficult to deal with the system could lead to real disruption from alternative companies providing services that banks provide today. Companies such as Alibaba are doing things banks are not allowed to do, for example, so corporates may start to use alternatives such as hedge funds for funding and Alipay or PayPal for payments.  And since some corporates are rated better than banks, corporates may increase their dealings with other companies as well.

Turning to corporate onboarding, PWC Director Peter Wong said opening a bank account is challenging and can take more than three months. While corporates want to be good citizens, banks’ internal processes are not geared to speed and need to be streamlined to make sure the customer is not jeopardised.

Rounding out the session with another poll that looked at which multi-bank services are most important for corporates, participants said balance reporting and payment initiation are their top priorities, followed by remittance information and reconciliation, standardized common message formats, and trade and supply chain.

 

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