Corporate banking customers, across the world, are increasingly seeking more personalised solutions from their banking partners in terms of financing, risk management, ESG alignment and overall advisory, while ensuring high operational efficiency through reduced delays, costs and more streamlined processes. Indeed, corporate banking is transforming to meet these demands and remain competitive – moving from manual to highly sophisticated and technology-focused, yet remaining relationship-driven. Banks are leveraging cutting-edge innovations to enhance client experiences and foster sustainable growth.
Key trends changing the landscape
Digital transformation has revolutionized modern financial services – automating processes and reducing costs, delays, and enhancing client interactions. It has eliminated traditional bottlenecks and pain points, leading to improved performance and profitability, as acknowledged by a majority of financial services executives.[1]
A key aspect of this transformation is personalization. As clients demand more tailored services, banks are looking to use technology to offer customized financing, risk management, and advisory solutions. The strength of the relationship between the bank and the client is directly proportional to the bank’s ability to anticipate the client’s needs and behaviors and deliver seamless solutions accordingly.
Another major trend shaping corporate banking is fintech collaborations. Even the most agile of traditional banks take time to innovate or change at scale. By collaborating with fintech companies, traditional banks are able to integrate new technologies and enhance service offerings to their large customer base, offering the best of both worlds.
The industry, in recent years, has been progressively focusing on sustainability. Businesses have ever-increasing needs for financial solutions that align with their environmental, social, and governance (ESG) strategies. By offering products such as sustainability-linked loans, corporate banks help play an important role in connecting clients’ operations to their sustainability efforts and results. In line with its commitment to the sustainability agenda and enabling its clients towards this critical goal, Mashreq became one of the top contributors in the banking sector to the UAE Banks Federation’s (UBF) pledge, to mobilise AED 1 Trillion in sustainable finance by 2030. Committed to facilitating AED 110 Billion ($30 Billion) in sustainable finance by 2030, Mashreq aims to build on years of sustainable finance deployment and ongoing efforts that has seen the bank facilitate financing for multiple adaptation-related projects, including water projects in Egypt, the UAE, Qatar, KSA, and Bahrain.
Emerging technologies
Artificial Intelligence (AI) and Machine Learning (ML) have played a role in banking even before they became buzz words – from helping automate previously time-consuming tasks like credit checks to today, enabling more efficient compliance reporting. AI and ML can analyze large amounts of data in real time, identifying patterns of fraud to effectively mitigate them beforehand. The combination enhances security and efficiency, strengthening the trust between clients and banks.
Blockchain and decentralized finance (DeFi) enhance corporate banks’ security and transparency. Blockchain’s tamper-proof, transparent ledgers help prevent fraud, reduce data breaches, and ensure accountability. DeFi streamlines operations with peer-to-peer (P2P) payments and faster cross-border transactions, overcoming global trade barriers.
Banking as a Service (BaaS) is a modern model allowing licensed banks to integrate digital services into non-bank products via APIs. This flexible approach reduces capital requirements and attracts investment from governments and venture capitalists, opening opportunities for startups.
At Mashreq, we’ve seamlessly integrated AI and new technologies into our digital transformation, enabling personalized, data-driven solutions for corporate clients. Transparency and optimising decision-making are central in our approach to advancing our service capabilities.
Challenges on the road to progress
While adoption of new technologies is key to growth for traditional banks, they also bring with them challenges.
Traditional banks face challenges in adapting quickly due to outdated legacy systems and complex compliance processes. Integrations with fintechs help, but they often require overhauling these systems. To overcome these challenges, banks must establish a well-defined digital strategy that aligns with business objectives. This foundation enables successful integration through phased implementation, minimizing disruptions and fostering interoperability and flexibility through API-enabled data exchange.
As new technologies are deployed within a bank’s infrastructure, cybersecurity-related vulnerabilities increase. Implementing robust protective measures, such as biometric authentication, is crucial to safeguard sensitive customer information, reduce phishing attacks, and prevent financial losses. Security measures must also consider the risks of AI accessing customer data and ensure it is protected from potential bad actors.
The future of corporate banking
The corporate banking sector is at a pivotal moment of transformation, where technological advancements and evolving client expectations are reshaping the industry faster than anticipated. Banks must embrace digital innovation, integrate AI, prioritize security, and address legacy system challenges.
Institutions that anticipate change and adapt with agility will deliver personalized, data-driven solutions. By moving forward with purpose and prioritizing sustainable value, banks can unlock new opportunities and elevate their solutions and services for clients.
NOTE: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of any agency of this website. This content is provided for informational purposes only and is not intended as a substitute for professional advice. The reader is encouraged to seek their own professional counsel on matters discussed within.
[1] ‘The value of digital transformation in financial services’, KPMG, https://kpmg.com/au/en/home/insights/2024/03/value-of-digital-transformation-financial-services.html
