Reaching true differentiation

A broad range of activities - and not just cost cutting - must be adopted if a financial institution's market share is to be maintained and managed, and are imperative if market share is to grow.

Consider a scenario in which every organization provides the same processing to ensure regulatory compliance. In this situation, there is little a customer can do to determine which bank is deserving of his business, other than price. Conversely, a bank that is able to clearly differentiate its product offering has a unique selling point that can attract and retain lucrative customers. Banks also offer value-added services to their clients as a means of moving away from commodity pricing and into accurate pricing for the real value that has been added.

Innovation in payments is invariably not about how the payment is processed. Ancillary services to payments are frequently more important to corporate customers: the provision of loans and liquidity, availability of data in real time, or pooling services and general cash management. It is the total offering that creates a fully rounded customer proposition, and whichever is chosen, the role of payments is to support these activities. Banks should therefore ensure that their payments service is able to facilitate these key areas.