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Digital Redefinition of Commercial Banking
Digital Redefinition of Commercial Banking
Ganesh Subramaniam

Senior Consultant at Draup

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Digital Redefinition of Commercial Banking

23 May 2019

Analyzing the digital shift across all elements of the banking value chain

1. RPA and Data Analytics Have Automated Redundant Workloads

Several redundant back-office roles have been automated using RPA and analytics. There is a major shift in the existing technology moving towards cloud and AI-based processes that are helping banks develop analytical tools to enhance product development and advisory services across the value chain. API and blockchain technology are quickly redefining almost all aspects of the commercial banking value chain. Banks are scaling Mobility, analytics and RPA solutions across enterprises by partnering with niche service providers.

Digital disruptions are, therefore, creating new opportunities for Technology Service Providers (TSP) to deliver next-generation digital solutions and services for the banking sector. Many banks are partnering with TSPs to leverage their domain and technical expertise in effectively building and integrating RPA solutions across multiple use cases.

Key Use Cases to Target:

  • Trading
  • Regulatory and compliance
  • Customer on-boarding
  • Lending process automation
  • Email ticket generation and allocation
  • Reporting and statement generation
Digital Redefinition Of Commercial Banking
2. Emergence of Digitally Influenced Roles

Several banking roles have been digitally influenced and disrupted. Commercial loan officers are a case in point. Digitization of loan applications and automated credit scoring systems eradicate the need for paperwork and manual KYC validation responsibilities of the loan officer. Digitization has also played a big role in trading. The impact of digitization transcends, more than just the trade process but also had a greater impact on the larger capital market causing a shift from an analysis and modeling role to a more advisory role.

As digital technologies and solutions get integrated with the traditional roles, banks are increasingly leveraging TSPs to design, build, monitor and manage these digital assets. However, unlike traditional ADM/ISM capabilities, we are observing TSPs and deep banking domain knowledge coupled with digital skills are gaining a major share in these opportunities.

3. Fintech Start-ups Dashboard

Fintech companies are developing digital solutions and channels for commercial banking use cases in a rather unique way. Fintech start-ups are providing automation platforms, payment services as well as open APIs to completely revamp the commercial banking value chain. Emerging fin-tech companies can broadly be categorized into six broad categories, robotic processes automation, analytics, cloud, artificial intelligence, Open API and Blockchain.

Commercial banks are excited and concerned with many of these point solutions. Though most solutions bring superior capabilities to their existing workload challenges, integrating them into their existing infrastructure and managing distributive systems or platforms. This is a unique opportunity for TSPs to orchestrate these platforms and solutions for banking and look to build strategic relationships with financial institutions.

4. Service Provider Opportunity Analysis
The digital shift in the commercial banking space has given rise to several opportunities to service providers. Technology service providers, with their expertise in banking technologies such as RPA and analytics are emerging as robust partners for development. The top 5 service providers accounted for over 50% of the $45 billion generated from BFSI outsourcing activities. Analytics, RPA and App development are high-value areas that technology providers and startups can target.