By Mayank Mishra and Dennis GadaHistorically, global banks have faced steep challenges managing an overwhelming amount of data across multiple countries, while simultaneously complying with unique regulations and tracking working capital. Some banks serving multinational enterprise clients are operating and managing thousands of bank accounts in different regions, resulting in complexities and elevated risks that could threaten the foundation of an entire business.
In response, technological advancements created new digital banking capabilities, allowing for fast and seamless account setups through a single portal offering tailored global insights and recommendations backed by AI. A new age of banking has emerged as these data-driven predictive modeling scenarios can aid customers in making better decisions.
Today, more banks are striving to become multinational—searching for ways to reach customers from afar while moving towards global locations. But doing so introduces new challenges in keeping data organized and ensuring real-time cash visibility. Banks’ biggest concern is how to provide efficient services for global customers, as the cumbersome process of collecting and analyzing the necessary data can take days or weeks. Preventing cyberattacks and fraud, complying with complex regulations and identifying emerging threats comprise just a handful of additional challenges currently overwhelming big banks in our new remote, digital-driven landscape. A solution to seamlessly oversee and manage global funds is now more crucial than ever before.
Enter multibank connectivity, an approach offering a simple, digital method to connect banks and accounts around the world and the ability to manage a huge number of accounts in different global locations and currencies with a single dashboard. Federal and state regulations are handled automatically, eliminating c-suite leaders’ fears of human error. With a single dashboard offering seamless access to their accounts, payments, financial markets, liquidity structures and macro trends, banking customers receive an unequivocal experience tailored to their specific needs and desires.
Banks worldwide are beginning to experience the benefits of implementing a global multibank strategy, including access to an integrated view of cash management across the entire global enterprise, powered by data and analytics, AI and cloud technologies. Multibank connectivity also allows for transactions between accounts and banks across different regions to process in real-time. Many fintech companies are already adopting multibank connectivity to access data insights that can determine their clients’ working capital requirements.
Powered by the capabilities realized by multibank connectivity, fintech companies are continuing to find opportunities to forge partnerships with global banks to digitize their legacy systems and cater to the digital-driven future of banking and doing so has become easier thanks to the multibank connectivity concept.
Open financial data is innovation fodder. Consumers and enterprises opt for the multibank option because they want more choice, ease and flexibility in how they manage their finances. Client-authorized shared data inherently drives newer business models, hyper-personalized products and fuels competition in the market. This can also open new avenues of value creation, where an ecosystem of partners can come together to create business models that deliver more for all participants.
Agility goes with the territory. It will be important to develop the inherent agility to partner with a wide set of competitors and build tailored offerings at the speed of changing customer demands and needs. The ability to anticipate changing trends, learn from adjacent industries and deliver with first-mover advantage will be key.
Multibank approaches mean opportunities for greater exploration of API-enabled embedded finance solutions. This is often easier to adopt for banks that have enabled their infrastructural core for multi-banking. This means fintech companies and other non-bank players, such as retailers, can amplify banks and their ability to create financial-services-plus offerings. This can prove to be a significant advantage as more players from outside of the financial services arena become competitors for conventional banks. With growth in interoperable payments in certain countries, platforms such as Google Pay, Facebook Messenger and WhatsApp are becoming payment initiation channels. This trend is expanding globally and provides additional opportunities reach new customers while engaging the evolving ecosystem.
Embrace systems that increase readiness to meet customers’ escalating expectations. Developing a continuous stream of product overlays that draw upon intelligent customer insights to win and keep customers will become inevitable.
Drive down costs further by improving operations efficiency. Sharing financial data allows for better adoption of automation technologies in avoiding multiple customer touchpoints and manual handling of data that lead to errors. This helps in building a more transparent handoff with customer-improving client experience and delivering efficiency benefits for bank. There are added advantages to participants in fraud protection, credit risk evaluation and tuned pricing.
Transformation at the cusp of data, analytics, AI and the cloud can bring disproportionate benefits.
The consequences of ignoring the digital transformation in favor of legacy operations are immense–regulatory guidelines can be overlooked and valuable time is wasted repairing outdated systems incapable of handling the demands of fast, digital-first banking. Banks should invest in new technologies to attract and retain new customers and to avoid colossal financial losses. As the banking industry strives to lead innovation across financial services, conversations are advancing and evolving around multibank connectivity. As we look ahead, in order to succeed banks worldwide need well-connected business operations, no matter the location.
Dennis Gada is SVP and head of financial services at Infosys. Mayank Mishra is managing director and global head of digital channels at Citibank.