Five Ways to Enable Differentiation in Transaction Banking

1. Make it easy to do business with you.

Right from the start, the customer experience commences with the account opening and know your client (KYC) processes. This “business onboarding” is where the client’s finance teams are coming to grips with intensive banking paperwork, sharing details of signatories, accounts structure, etc. First impressions count; you must make your clients’ tasks easy and stress-free from the very start. At the very least, the bank should leverage self-serve tools such as client community management, or business process modelling (BPM) workflows to collect client information, which will become critical as part of the technical onboarding and the ongoing BAU operational relationship. Internal service-level agreements (SLAs) or service level objectives (SLOs) between the bank’s various onboarding teams will allow predicable and consistent client experience, with dates and timelines you can commit to.

2. Step up your game with a service-oriented banking channel.

Typically, your client’s priority is to optimise the way they operate their order-to-cash and purchase-to-pay cycles, while optimising working capital. Historically, banks are servicing a few points of needs coming out from these processes, such as payments, cash management, trade finance and investment banking. These are multiple facets of the same processes for the customer; the least you have to do is to present the access to those services in a consistent and simplified way. This is often called a “consistent cross-channel experience,” with the principle of a technical “single pipe” between the client and the bank. However, a single pipe on its own is not enough; the bank needs to meet consumer-type expectations for the user experience, hence you need to step up your game.

3. Shift your staff’s focus to activities that deliver unique value.

There is no valid economic model or competitive logic in running large IT empires, when business partners and solution providers can do it better, faster, cheaper and with the same levels of security. Banks should be able to focus their resources where real competitive advantage can be gained, making a measurable difference to the bottom line. Cloud technology and managed services bring unprecedented scale for Enterprise IT functions and the lines of business supported. Channel technology, client onboarding and industry standards are only means to an end; everyone needs to comply and provide the same components. Why task your most valuable people on activities that are complex but not distinctive, when others are outperforming you effortlessly in the same areas using external providers?  

4. Create value within the customer’s environment.

Running a global treasury strategy has its unique challenges, with only a fraction of the associated internal challenges exposed to the bank. Financial institutions need to start to show interest in the deeper needs of their corporate clients, offer to cross the bridge, and literally integrate business processes rather than just the technology. Resource and market pressures mean that corporates increasingly rely on their vendors for advice, innovation and cost reduction.  Successful banks will need to offer business consulting skills, deep domain expertise and best-in-class delivery. Remember that clients are expecting to receive and consume this advice in a very different way to a consultancy project; this should be factored within the fabric of the commercial and operational relationship. SMEs, mid-market clients and larger corporate customers are all leveraging cloud technology in some shape or form, making them a very educated and clever buyer when it comes to consuming the bank’s services and products.

5. Don’t sell; challenge, advise and map their buying process.

Clients have changing expectations and attitudes towards financial technology and banking. In only a few years from now, a generation of Millennials will bring new expectations about how banks will need to treat them as customers. These demands will need to be met immediately, in a personalised, social and consultative manner. The bank must also be prepared to demonstrate the value they provide throughout the term of the partnership. Client feedback shows that a key driver of customer loyalty is the bank relationship director’s ability to offer unique, valuable perspectives on the market, educating them on issues and outcomes.

Let’s conclude with one last provocative thought: “Measure what matters most, but don’t let what you measure become what matters most.” Are your organisation’s metrics around transaction services really rewarding differentiation?   

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