DigitalCFO Asia

Transformative Insights for Finance

CFO Perspective: The Future Corporate Banking Experience is Open

3 min read
Image: Finastra

Digitalization. Innovation. Collaboration. That pretty much sums up the expectations of corporate banking customers.

According to IDC, 65% of GDP is set to be digitalized by 2022, while 75% of organisations will have comprehensive digital transformation roadmaps by 2023 – up from only 27% today. More importantly, they also predicted that 75% of business leaders will leverage digital platforms and ecosystem capabilities to adapt their value chains to new markets, industries, and ecosystems by 2025.

This paints a picture of businesses searching for better ways to leverage technology, and their relationships with partners and ecosystems, to build better business models where they are able to build more value for themselves and for their customers. For some, this means looking to their banking partners for help.

Take for example, Gulf Oil Marine. In a conversation with Michael Walker, Finastra’s Head of Working Capital Finance, Gulf Oil Marine CFO, David Richard, outlined their company’s pain points when it came to banking.

Gulf Oil delivers shipments 24 hours a day, 7 days a week. Customers are invoiced daily, to help manage revolving credit, with the bulk of payments arriving via TT. Customers are also sent updated statements of account on a daily basis. The challenge for Gulf Oil is the need to ensure that incoming payments are reconciled with the corresponding invoices and accounts. This process is incredibly time intensive, not just because of the sheer volume, but also because the remittances or notices which are received from the banks do not contain all the necessary detail.

Enter the dream banking partner:

With a strong online platform that Gulf Marine is connected to all the time, finance staff are able to review payments and reconcile invoices more rapidly, instead of relying on emails for payment updates which can cause delays in the process as they go unread, sometimes for up to 24 hours.

Better yet, a platform allowing Gulf Oil to access, at any time, a summarized report of payments, for a specific time frame, that have been received, that are on route or that have been delayed. These summary reports also contain the necessary details that indicate which invoice has actually been paid. And perhaps, these reports are just a formality, as the information has already been fed directly into Gulf Oil’s ERP, which then only flags exceptions for checking.

Systems like these not only make the reconciliation process easier for Gulf Oil, but it has the added benefit of allowing Gulf Oil to provide better customer service to their customers. With information being more readily available, Gulf Oil can provide more detailed and timely updates to their customers, advising which invoices have been paid, which ones have payments incoming, and which ones will need to be paid in the next week.

By 2022, we can expect 70% of all organizations will have accelerated use of digital technologies to transform existing business processes to drive customer engagement, employee productivity, and business resiliency.

Companies such as Gulf Oil are looking for ways to boost employee productivity, while simultaneously providing a better experience for their customers by leveraging the technology platforms and ecosystems that they share with their banking partners. They, and other organisations, are looking for the value-added services that their banks can provide, and in the current climate, they are looking for these services in an accelerated way.

And this brings us to the idea of the open platform approach for corporate banking.

An open platform approach allows banks to be agile and quick to market, delivering innovation at hyperspeed. The heart of the open collaboration, and the kind of collaboration where tools built by others can be deployed internally to deliver a solution to banking customers more rapidly, or where your banking customers can use APIs to access the data that they need, when they need it, in the way that they need it.

So, it needs some repeating:

By 2022, 70% of all organizations will have accelerated use of digital technologies to transform existing business processes to drive customer engagement, employee productivity, and business resiliency.

By 2025, 75% of business leaders will leverage digital platforms and ecosystem capabilities to adapt their value chains to new markets, industries, and ecosystems.

Corporate customers want it, and it is time for the banks to build it.

This article covers a discussion between Michael Walker – Head of Working Capital Finance at Finastra, and David Richard, CFO at Gulf Oil Marine CFO during Finastra Universe 2021. You can watch this sessions and others on demand at https://www.finastra.com/finastra-universe.