How Client Service & Technology In Post-Trade Is Evolving

In securities services, for example, since 2017 Commerzbank has been working in partnership with HSBC Transaction Services GmbH through which our securities settlement business processes is transferred to a joint venture, with operations scheduled to begin early next year. The partnership, which allows us to leverage our expertise and HSBC’s state-of-the-art securities platform, complements our wider commitment to simplify and improve processes to clients, while also reducing costs and process complexity.

Rob Scott argues that the evolving focus of FI clients requires a change of tack by correspondent and transaction banking partners and how the use of technology in client interaction is on the up.

The post-trade business is markedly different compared to years gone by. While it still necessitates that banks maintain regulatory robustness and become increasingly cost-efficient, there’s greater demand for more personable client relationships, supplemented with state-of-the art technologies.

Delivering in this new environment is no easy feat: it requires new thinking and approaches to how we as banks govern our client interactions. In this new and increasingly complex environment digital services, though critical, is only one part of the equation; after all, banking remains a business founded on human relationships. So, what exactly has changed?

Changing business

It’s simple: banking is no longer solely product-driven. Gone are the days when an FI client has a dozen contacts at their correspondent banking partner – each offering an individual service or product with no joined-up thinking.

Banks are instead favouring relationships that can better guarantee the exchange of expertise and more integrated thinking. For instance, FI clients are not looking for singular custody or clearing products, rather they require a more rounded, strategic dialogue to solve business challenges. We, as a strategic partner, strive to gain a holistic insight to a client’s operations through one point of contact. This consideration is addressed by our dedicated relationship managers, able to align business objectives whatever they may be and in doing so mobilise resources the bank has to offer in a holistic manner and delivery to the client: from ensuring regulatory processes are watertight, reducing costs, to service client needs, or to help expand and grow a domestic or regional client’s presence either in its local market or in the international markets it operates.

Strategic partnerships

This holistic approach also enforces collaboration with third-parties.

How does this work, in practice?

Let’s say, for example, that a client executes via another bank’s trading desk but wishes for us to handle all post-trade activities. Thanks to Open Banking principles, our technological capabilities can allow that to happen seamlessly via a single portal.

The new way isn’t only underpinned by collaboration with fellow banks. Robotic Process Automation (RPA) is allowing us to devote more human capacity to our clients, thanks to the help of technology providers. We are engaged in a pilot scheme using artificial intelligence (AI) solutions to automate mundane and predictable data processes, leading to time efficiencies. The end-result is that our energies are redirected to providing meaningful and enhanced client interaction – at the beginning of the working day. Again, this ensures that we are better connected to our clients and solving problems sooner for our clients activities.

Banking today is a markedly different game – one where careful collaboration is likely to breed the winners. But even if the industry’s modus operandi for client service has changed, our dedication to meeting the client’s needs and best interests remains unwavering, as before. In this respect, we are never standing still - always seeking to bring the very latest products, services and innovation direct and simply to address client needs in a comprehensive manner.

Technology Transformation

The post trade landscape is going through a wholesale metamorphosis. New technologies are constantly evolving with various business and use cases being established, piloted and tested. Robotics, AI, RPI, Blockchain, Tokenised assets, Big Data and advanced analytics to name a few, all looking to strip cost and complexity from legacy infrastructure and provide the necessary scale, speed and user experience in order to connect better with the clients. It is true that some of these technologies will take time to be more widely adopted and accepted by the community. Some will take different paths from the current thinking and some will fall by the wayside. What is a certainty is the service landscape will go through considerable transformation over the coming years. Technologies will enable banks to connect better, faster and simpler with clients with far richer personal interactions.

It’s a fact, that post every industrial revolution in modern history output and productivity has significantly increased. From today, new products and services will evolve and come through in new and innovative ways, designed to connect and service clients in a more productive and interactive manner. Changing the engagement model with clients is just the start.

Rob Scott Head of Market Services Commerzbank