N REINCARNATION OT TRANSFORMATION
BUSINESS BANKING IN 2020 AND BEYOND Traditional banking is crying out for a revolution. In a world where consumer services – from transport to ordering food – are delivered on-demand, digitally and instantly, we now expect the same from our financial institutions. But while the past few years have seen a surge in consumer-focussed banking innovations, spurred by the likes of Monzo, Revolut and Starling, innovation for business customers has lagged behind. Back in 2018, 85 per cent of banks cited digital transformation as a business priority, but fast-forward to 2020 and the needs of modern businesses are still not being met. Regulation remains a hurdle, and services continue to work for the
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few rather than the many. As a result, many businesses, and sometimes entire industries are underserved by traditional banks. In the decade that lies ahead, traditional business banking services will be reinvented to become more modern, agile and reflective of today’s open banking-led era.
with ever greater scrutiny – especially if they belong to particular market segments. Some businesses – sometimes entire industries, such as foreign exchanges or payment service providers – despite experiencing considerable growth, have been deemed too risky by banks and therefore remain underserved.
WHERE HAS TRADITIONAL BUSINESS BANKING FALLEN SHORT?
Running to stand still On the plus side, digital transformation efforts are underway, but it’s becoming clear that these aren’t happening fast enough or being focussed in the right places. Incumbent banks have made huge strides towards innovation but, at today’s rate of change, this only has left them standing still. In the business banking world, onboarding processes remain
High risk is also high growth The last 10 years have seen waves of regulation, pushing many incumbent banks to de-risk their business. In many cases, this ‘due diligence’ has been stretched to its extreme as banks prospect and sense-check new customers
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