Commercial Banking

Disruption, both from within and outside of the traditional banking environment (think Ali Baba) are making real inroads into traditional banking products and services, forcing commercial banks to redefine their roles. 

With both disruption and the syndication of risk creating more routes into balance risk and return, commercial banks will have to improve the sophistication with which they manage their balance sheets and apportion RWA across products and clients.

By improving credit models with far greater internal and external data ingestion, along with more sophisticated analytics, banks gain access to more, better quality business, while empowering themselves to decline the “wrong” kind too.

Digital technology enables an intelligent delineation in the servicing needs of SME, mid-market and corporate clients. There is a growing need to focus on the time-to-value for smaller clients where cashflow is a far higher priority. Simultaneously, banks should prioritise a single view of the client’s financial performance through credit assessment, while improving client intimacy through tailored services that extend value.

The mutalisation of sections of the value chain that do not confer competitive advantage is, in our view, one of the most innovative ways to address pressure on costs. By sharing platforms and processing, banks can make structural changes to their cost base and focus investment on what really matters, while maintaining compliance and customer service.