2020 Corporate and Investment Banking Trends Set to Shape Client Management

The client experience is going to be instrumental in defining the future direction of the C&IB banking sector, with digitalization being absolutely key to its evolution. Clients’ expectations have been raised by ubiquitous digital technologies and highly personalised services, and they are now demanding the same frictionless experience from all of their financial service providers. 

Fenergo research finds that 84% of banks believe a client’s experience during the onboarding process impacts the lifetime value of the client. More than a third (37%) of investment banks and 30% of corporate banks have lost a client or prospect due to inefficient onboarding.

Financial institutions know that they need to improve client onboarding and management throughout the client lifecycle, so over the next few years we will undoubtedly see increased automation around the end-to-end client lifecycle.

Financial services firms must empower clients during the coming years, by providing more digital touch points so they can self-serve, while at the same time driving increased automation to ensure that client touch points are relevant, efficient and effective, e.g. the automation of client outreach for KYC.  .

 2. Digitalization – Streamlining Front-to-Back Office Operations

In a recent Fenergo webinar, 42% of attendees stated that the complexity and cost of modernising legacy systems was their primary obstacle to achieving digital transformation. Many banks will step back and start taking a pragmatic three-year view of their technology in order to solve the conflicting challenges of sustainable regulatory compliance and delivering a digitalised experience front-to-back, both and internally and externally to clients.

Organisations recognise that they have core technology that is difficult to unseat but they are actively looking at core building blocks, such as Fenergo and Salesforce, that will enable them to join their front-to-back office systems and improve operational efficiency.  Development of a ‘client eco-system’ is key, where FI’s derive a view of their target technology state, embracing their legacy technology, leveraging core building blocks and adopting nimble solutions to accelerate progress.

3. Driving Cost Efficiency

Every bank we talk to is looking to cut down the cost of client management. The evolving regulatory environment, cost of managing clients and remaining compliant while providing that excellent customer experience builds the business case for digitalization throughout the client journey.

Banks can strike the right balance by integrating Client Lifecycle Management (CLM) and Customer Relationship Management (CRM) technology to streamline the customer journey. From front office to back office, we will see a wave of digital transformation move through the financial industry, as more and more banks turn to data-led solutions to automate and streamline operational tasks.

We’ll see more banks leveraging data resources to get a 360° view of their client in 2020 and beyond. This will allow banks to segment clients effectively, discerning profitable clients who require a more personalised service from those who can be managed on a fully electronic basis.  The key mantra for 2020 and beyond will be ‘if you can automate it safely, then we must do it’.  Successfully employing this strategy has the potential to take enormous amount of cost and friction from the industry.

 4. The Evolving Regulatory Landscape

The regulatory environment looks very different from five or 10 years ago, and it is still evolving fast. Banks need to keep up to date with changing Anti-Money Laundering (AML) regulations, including the 5^th Anti-Money Laundering Directive, and data privacy legislation, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Banks want a sustainable and cost-effective way to remain compliant. That means automating where possible and digitalizing regulatory compliance, for example, with digital KYC technology.  The key trend we see here is around a movement towards common / global standards and a broader adoption of best practice industry standard solutions to solving these regulatory challenges.  The old saying of ‘strength in numbers’ rings very true in this space.

Where will digitalization take you in 2020?

At Fenergo, we talk to financial institutions at various stages of their evolution – from awareness, to acknowledgement and remediation, moving towards sustainability, and those who are further along on their digital transformation journey.

2020+ is going to be all about providing the right channels and experiences to the right customers at the right time, for the right cost.  Understanding the cost to service a client vs. their value will be key in driving out a product and service catalogue that allows organisations to maximise revenues against a backdrop of margin pressures.

We’re in an exciting time of change right now and confidence in new technologies is at an all-time high. I expect to see that confidence evidenced in the way that financial institutions approach operational activities in the coming year. What works well for the FI must also work well for the client and I expect more FI’s to unleash the potential of this win-win equation over the coming period.