Servicing corporate clients is always tricky. They are very demanding and always trying to lower their cost of banking with high expectations from banks. The scale of business that the corporate clients bring in, which compliments their negotiating power
ensuring that the corporates get what they want. Banks have been traditionally extending their services to corporate clients by adapting new systems, new processes and even going an extra mile on relationship based services to meet big expectations. All this
comes with an added cost of servicing to the bank by way of investing in resources, technology and ever changing demands from large to medium sized clients. The failure to adapt changes demanded by corporate customer usually results into higher reputational
loss than financial. It is a worry for most of corporate divisions in the bank. What is solution then? Simple answer is empower them.
Sanctioning credit line could be bank driven, processing daily banking transactions or salary credits end of month is more routine business. And that’s the space to empower. Supporting such routine business generally consumes more resources, energy from
team mostly time bound. Everyday business closes with no backlog from today’s such operations.
Many of reputed banking systems (especially on corporate platform) allow various services to be exposed to the corporate client and interact with their in-house system or allow access to various functions to corporate users through internet. Most common
functions that can be offered would be uploading payables receivables, bills, salary data, pay orders etc. These functions are repetitive and corporate users know exactly what they are expected to do. Users once trained can start working of their own without
much handholding or monitoring from bank.
Advantages to companies are very obvious. They can process their transactions at their convenient time, approvals are within and errors are better controlled by organization. Bank is also benefited by shifting these functions to companies directly. Of course
these arrangements are not simple to work out as many challenges related to system capability plus flexibility, infrastructure readiness, security of data and so on will need to be addressed before venturing out on such proposals.
More and more empowerment to clients is the key to allow autonomy to clients, free up bandwidth for the bankers. This may prove to be very important measure to reduce operational overheads, resources optimizations and offering innovative business proposals
in the market.
Flip side to this empowerment is challenges in designing and maintenance of system that can cater to various applications used by each corporate house. While operational cost may come down initial investment in technology may be huge to introduce flexible,
adaptable and scalable yet robust systems in bank. Many banks may like empowering their customers but also back out due to these challenges.
Techno-financial advancements and new breed of systems are going to surely change the way bank service their clients in near future