Research looked at changing requirements of post-pandemic corporate banking and new banking priorities for corporate clients
TOKYO and PLANO, Texas – March 30, 2022 – NTT DATA, a digital business and IT services leader, today announced the results of its annual global banking research report, Corporate Banking Outlook 2022, comparing the latest demands from the largest global corporate businesses with the current investment priorities of global banks. The report revealed a shift in post-pandemic corporate banking toward more integrated, digitized, sustainable banking that is aligned to the new generation of millennials taking up senior positions in corporate businesses.
The research included surveys of 880 bank and corporate client senior decision-makers across 12 countries, collecting their insights about how corporate banks should future-proof themselves. It found that accelerated adoption of technology combined with generational shifts in clients and the ongoing recovery from a global pandemic have fundamentally changed banking.
Corporate clients are now three times more likely to communicate with their bank primarily through Application Programming Interfaces (APIs) – a form of machine-to-machine communication – rather than person to person. The traditional corporate banking image of personal client relationships is confined to history as corporate clients prioritize end-to-end digitization and frictionless banking. 85% of banks report they are working on updating their portals, a change driven by client centricity and improving the customer experience.
“There is a generational shift happening in almost every industry currently but especially in banking, which is dictating the future of corporate banking,” says Matt Provencher, President of NTT DATA Services’ Financial Services and Insurance Business. “The pace of change in banking is increasing as banks are investing in new technologies such as AI and automation, being driven by customer demand.”
The research found that banks increasingly need to fuse their services with the evolving needs and demands of their customers. More specifically, corporate demand is shifting from traditional trade and working capital products to more structured products. Technology is changing, too. Banks are starting to bring in more automation, and they are using advanced machine-learning-based models in areas such as credit risk analysis.
There was evidence that banks need to listen to their corporate customers and their specific industry needs to deliver the services they demand. For instance, 70% of construction companies report unmet demand for omnichannel corporate cash management and lending solutions. Many products demanded by corporate customers have not yet been integrated into commercial banking platforms.
The increasing demand for sustainable banking
Environmental, Social and Governance (ESG) has become a key consideration for corporate banks. As the world looks to the future, regulators and policy-makers are becoming more vocal about the need for greater adoption of ESG. They recognize that moving toward a low-carbon economy is going to create additional complexities for financial services firms – and increased risk too as companies they service adapt.
Corporate clients want to bank with a firm that reflects their views and beliefs as a new generation of corporate banking clients are prioritizing the environment and sustainable banking. The study found that 48% of corporate respondents wanted their banking provider to invest in more “green” or sustainable products and services. This demand is being met to an extent. On the banking side, 44% report they are already investing in it.
“For corporate banks that want to remain competitive, they’ll need to adapt to the growing demand for ESG-focused products and services,” Provencher said. “With nearly half of corporate clients wanting their bank to prioritize sustainability, corporate banks must prioritize ESG-focused initiatives.”
For more information on the topics discussed in this press release, please download the full research report.