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Top-10 Technology Trends in Commercial Banking: 2018

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Until recently, commercial banking appeared relatively less prone to disruption when compared with retail banking. Things are beginning to change, however, thanks to increasing expectations from corporate customers and the proliferation of next-gen technology. Ongoing industry regulations are encouraging bank innovation and opening doors for new market entrants such as online marketplace lenders. Banks are overhauling their back-end processes through digitization and are leveraging data analytics and automation to streamline operations. Application Programming Interfaces (APIs) are being used to connect with third parties such as FinTechs to collaborate and resolve long-standing customer pain points, including slow payments and settlement cycles as well as complex and paper-based trade finance processes. Commercial banking is expected quickly evolve faster in the coming months and years. This report shares trends likely to impact commercial banking ecosystem dynamics in 2018.

Published in: Economy & Finance
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Top-10 Technology Trends in Commercial Banking: 2018

  1. 1. Commercial Banking Trends 2018 Capgemini, November 2017
  2. 2. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 2 Commercial Banking Trends 2018  Banks Make Significant Investment in Back-Office Digitization01  Tech-Powered Marketplaces Connect Borrowers and Lenders, Boost Lending Activity 02  Banks Launch ‘Adoption-Ready’ Blockchain- Based Solutions03  Banks Leverage Automation to Streamline Operations 04  Banks Provide Transparent, Convenient Corporate Payments Services in Real Time05  Banks Use Predictive Analytics for Credit Scoring Institutions and Risk Management 06  Banks Use APIs to Partner with FinTechs, Meet Unique Needs of Corporate Customers07  Banks Develop Agile and Open Systems to Enable Non-Standardized Third-Party Integrations 08  New Banking Industry Regulations Spur Competition, Innovation09  Banks Migrate Data, Processes, and Infrastructures to Hybrid Clouds 10
  3. 3. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 3 Banks Make Significant Investment in Back-Office Digitization Source: Capgemini Financial Services Analysis, 2017 Trade Finance Improved Customer Experience Cash and Liquidity Management Integration of Digital Channels International Trade Quick Launch of Products and Services Commercial Lending Cost Savings Key Commercial Banking Areas Being Digitized Benefits Commercial Payments Compliance and Reporting
  4. 4. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 4 Tech-Powered Marketplaces Connect Borrowers and Lenders, Boost Lending Activity Source: Capgemini Financial Services Analysis, 2017 Faster and Flexible Credit Access Emergence of Advanced Technology Advanced Use of Data Analytics Capability Lower Cost and Higher Margins Associated with Online Platforms Drivers Implications For Banks Increased Competition Banks will Partner or Collaborate with Marketplace Lenders Opportunity to Invest for Higher Returns
  5. 5. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 5 Banks Launch ‘Adoption-Ready’ Blockchain-Based Solutions Source: Capgemini Financial Services Analysis, 2017 Key Features Multiple Consortiums Increased Investments Enablers New Platforms Increased Adoption Smart Contracts Real Time Update and Payments Elimination of Intermediaries Automatic Settlements Transparent Processes Reduced Risk of Default/Fraud
  6. 6. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 6 Banks Leverage Automation to Streamline Operations Source: Capgemini Financial Services Analysis, 2017; “Robotic process automation (RPA) - The next revolution of Corporate Functions,” Capgemini Consulting, 2016 1:4 1 Robot replaces ~ 4 Employees 50- 90% Savings on cost, with the help of robots when compared to employees 3-6 Months, expected ROI Faster Processes Enhanced Customer Experience Allows Employees to Focus on Other Value Added Tasks Reduction in Operational Costs Magnified Efficiency Seamless Interoperability Benefits
  7. 7. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 7 Banks Provide Transparent, Convenient Corporate Payments Services in Real Time Source: Capgemini Financial Services Analysis, 2017 Drivers Real-Time Payments Flexibility Using Multiple Providers Lower Costs Better Experience Across Channels Security and Transparency Ease of Return Processing
  8. 8. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 8 Banks Use Predictive Analytics for Credit Scoring Institutions and Risk Management Source: Capgemini Financial Services Analysis, 2017; "Big Data and Business Analytics Revenues Forecast to Reach $150.8 Billion This Year, Led by Banking and Manufacturing Investments, According to IDC", IDC, March 14, 2017 11.9% Expected CAGR of Worldwide Big Data Analytics Spending across industries from 2016- 2020E 13.3% Expected CAGR of Worldwide Big Data Analytics Spending in Banking Industry from 2016- 2020E Credit and Counterparty Risk Management Fraud Detection, Prevention, and Mitigation Regulatory Compliance Applications of Risk Analytics in Banking
  9. 9. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 9 Banks Use APIs to Partner with FinTechs, Meet Unique Needs of Corporate Customers Source: Capgemini Financial Services Analysis, 2017; Celent, Inc.: “Open Banking APIs: Driving Developer Adoption,” Patricia Hines, Aug 29, 2017 Amplify Banks Reach Increase Revenue Stimulate Innovation >275 New payment and banking APIs published by banks and FinTechs from 2015 (Jan) to 2017 (Aug) Drivers Regulations Faster Time to Market
  10. 10. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 10 Banks Develop Agile and Open Systems to Enable Non- Standardized Third-Party Integrations Source: Capgemini Financial Services Analysis, 2017 Drivers Need for Greater Efficiency Flexibility to Adapt to Industry Changes Increased Adoption of Cloud Increased Openness and Collaboration in the Industry Adoption of APIs Focus Areas Supporting Infrastructure Executive Leadership Buy - In Collaboration and Partnerships Realigned IT Processes Project Management Role and Responsibilities People and Culture
  11. 11. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 11 New Banking Industry Regulations Spur Competition, Innovation Source: Capgemini Financial Services Analysis, 2017 Highly Concentrated Banking Industry Regulators Push for a Level Playing Field Need for Improvement in Quality, Variety, and Access of Products and Services Drivers Implications FinTechs, Challenger Banks, and Neo Banks are Thriving Customers Gain Improved Products and Services Greater Competition Banks Investing in Innovation Banks Collaborating with FinTechs
  12. 12. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 12 Banks Migrate Data, Processes, and Infrastructure to Hybrid Clouds Source: Capgemini Financial Services Analysis, 2017 Cost Efficient Seamlessly Scalable Business Optimized Hybrid Cloud Benefits Reliable Private Cloud Benefits Public Cloud Benefits Stability Flexible Secure Low cost Adaptable Pay As You Go
  13. 13. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. With more than 190,000 people, Capgemini is present in over 40 countries and celebrates its 50th Anniversary year in 2017. A global leader in consulting, technology and outsourcing services, the Group reported 2016 global revenues of EUR 12.5 billion. Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience™, and draws on Rightshore®, its worldwide delivery model. 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 © 2017 Capgemini. All rights reserved. Rightshore® is a trademark belonging to Capgemini. This message is intended only for the person to whom it is addressed. If you are not the intended recipient, you are not authorized to read, print, retain, copy, disseminate, distribute, or use this message or any part thereof. If you receive this message in error, please notify the sender immediately and delete all copies of this message.

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