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Top Trends in Commercial Banking: 2020

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The commercial banking industry faces daunting challenges. Operational costs continue to rise. Corporate clients seek convenience and personalized products and services. Cybersecurity is a major concern as more and more bank processes become digitalized. Compliance with wide-ranging open banking regulations is mandatory. The entry of BigTechs and other players is heating up competitive pressure. Therefore, it is essential for banks to transform and adapt to the changing business environment.
Read our Top Trends in Commercial Banking: 2020 report for analyses of the initiatives, new solutions, and trends expected to shape the commercial banking ecosystem in 2020 and beyond.

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Top Trends in Commercial Banking: 2020

  1. 1. Top Trends in Commercial Banking: 2020 December 2019 Link: https://www.capgemini.com/top- trends-in-2020/
  2. 2. 2© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Source: Capgemini Financial Services Analysis, 2019 Intelligent bank Deep customer insights Data-driven compliance Emerging technologies help banks heighten cybersecurity effortsTREND 6 Banks use Artificial Intelligence (AI) for anti-money laundering (AML) complianceTREND 5 Virtual accounts help corporations self-manage transactions efficientlyTREND 4 Banks adopt cloud services to increase operational efficiency and scalabilityTREND 3 Banks adopt blockchain technology to make cross-border trade efficientTREND 1 Real-time payments drive cash and liquidity managementTREND 2 Open bank Banks collaborate with FinTechs to serve small- and mid-size enterprises betterTREND 8 Banks build developer portals as part of Open X adoptionTREND 7 Top Trends in Commercial Banking for 2020 by Capgemini
  3. 3. 3© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Source: Capgemini Financial Services Analysis, 2019 Trade finance blockchain consortia Voltron Marco Polo Batavia We.Trade HKTFP Automation improves operational efficiency Real-time communication and tracking of goods Implications Payments settled faster Better transparency reduces fraud/default risks Transactional costs reduced - intermediaries eliminated Trend 1: Banks adopt blockchain technology to make cross-border trade efficient Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  4. 4. 4© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Real-time payments drivers Corporate clients’ intraday liquidity requirements estimated manually Reusing internal liquidity is inefficient Inability to mobilize and manage cash Existing payment mechanisms have longer clearing windows Implications Real-time methods improve cash and liquidity management Predictive balances can ease clients’ liquidity issues Personalized short-term credit offers at tailored price points Source: Capgemini Financial Services Analysis, 2019 4© Capgemini 2019. All rights reserved | Trend 2: Real-time payments drive cash and liquidity management Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  5. 5. 5© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Source: Capgemini Financial Services Analysis, 2019 Access to a shared pool of configurable computing resources can increase a bank’s ability to innovate by enhancing agility, efficiency, and productivity Efficient cloud solutions can ease traditional technology risks, such as capacity, redundancy, and resiliency concerns. Traditional IT infrastructure capex investment reduced as banks more efficiently manage computing capacity to satisfy client demand Agile innovation Risk mitigation Cost benefits Trend 3: Banks adopt cloud services to increase operational efficiency and scalability Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  6. 6. 6© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Corporate treasury and accounting departments struggle with inefficient cash management methods Corporate clients seek greater control over their money with quick access to receivables while extending payables In an experience-driven ecosystem, virtual account management (VAM) services are a differentiating value proposition for banks VAM services can be s a source of non- interest income, especially in an era characterized by shrinking interest income. 6© Capgemini 2019. All rights reserved | Banks can access valuable structured client data, which they can then analyze to generate business insights Source: Capgemini Financial Services Analysis, 2019 Trend 4: Virtual accounts help corporations self-manage transactions efficiently Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  7. 7. 7© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 US$800 billion to $2 trillion US$26 billion Estimated money laundered annually (in current US$) Penalties collected by regulators in the last decade for AML/KYC violations Source: 1) Capgemini Financial Services Analysis, 2019 2) UNODC, “Money-Laundering and Globalization,” https://www.unodc.org/unodc/en/money-laundering/globalization.html, accessed October 2019. 3) Fenergo press release, “Global AML/KYC & Sanction Fines,” September 26, 2018, https://www.fenergo.com/aml-kyc-sanction-fines. Implications Fewer false positives drive up operational efficiency Increased effectiveness bolsters regulatory compliance High scalability with less human intervention 7© Capgemini 2019. All rights reserved | Trend 5: Banks use AI for anti-money laundering compliance Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  8. 8. 8© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Biometrics Blockchain Artificial intelligence Incorporate a digital and physical dimension to customer authentication, making it difficult for cyber criminals to replicate customer data Inherent features augment security: data immutability, built-in transactions’ audit trail, greater transparency Detects breaches more accurately and at lower costs; responds to breaches faster Source: Capgemini Financial Services Analysis, 2019 8© Capgemini 2019. All rights reserved | Banks that leverage new technology and innovations can boost brand reputation and client trust Trend 6: Emerging technologies help banks heighten cybersecurity efforts Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  9. 9. 9© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Enable a seamless and integrated experience for commercial clients Enhance client experience and loyalty Portals are a cost- effective and speedy path to innovation Catalyst for banks to fill key positions in the future ecosystem Source: Capgemini Financial Services Analysis, 2019 Future-focused banks are turning regulatory compliance into a strategic competitive advantage that balances compliance costs with new market opportunities and revenue streams Trend 7: Banks build developer portals as part of Open X adoption Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance
  10. 10. 10© Capgemini 2019. All rights reserved |Commercial Banking Trends 2020 | December 2019 Implications for FinTechs Fast turnaround time and minimum documentation Flexible and competitive interest rates Loan repayment flexibility Relaxed credit profiling Implications for Commercial Banks More cross-selling and up- selling opportunities by iterating and expanding product offerings to middle-market business customers Banks can focus on core offerings while simultaneously offering innovative and digital products and services to corporate clients through FinTechs. Source: Capgemini Financial Services Analysis, 2019 Top Trends in Commercial Banking for 2020 by Capgemini Intelligent Bank Open Banking Deep Customer Insights Data- Driven Compliance Trend 8: Bank/FinTech partnerships pay off in new services for small and medium businesses
  11. 11. A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of over 200,000 team members in more than 40 countries. The Group reported 2018 global revenues of EUR 13.2 billion. About Capgemini Learn more about us at www.capgemini.com This message contains information that may be privileged or confidential and is the property of the Capgemini Group. Copyright© 2019 Capgemini. All rights reserved. People matter, results count.

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