The other day I was chatting with an executive at a major UK commercial bank. And they made an observation that echoed many of their counterparts in other institutions.

“I don’t want us to spend the next two years simply dealing with the aftermath of the pandemic,” they explained. “Instead, we need to focus on maintaining the momentum of our digital transformation. Because that’s what will position us for success in the long term.”

Many other bank executives are saying the same. And they’re aware of the irony that COVID-19 could distract them from their investments in digital transformation – yet has also made that migration all the more imperative.

Converging trends

We’ve identified eight powerful digital trends that are common to a greater or lesser extent across all markets, the UK included. Here they are.

Trend 1: It’s about digital fluency, TQ, and you

As digital technologies permeate the bank, they reinvent everybody’s way of working. So it’s vital to create a culture where digital fluency and “technology quotient” (TQ) flourish, with people adapting to new technologies and understanding how to use it to elevate their performance. Crucially, digital isn’t just about replacing humans: the Relationship Manager (RM) is still at the heart of commercial banking. Instead, technology empowers the RM and relieves them of routine tasks – while also enabling them to offer clients new levels of service and insight.

Trend 2: Digital foundations aren’t built in a day

Commercial banking was underinvested in for many years, as capital was targeted at other priorities like risk management, compliance and retail banking. The result? Processes were often clunky and outdated, especially in lending. Over the past three or four years we have seen many commercial banks grasp the nettle and invest in digital foundations that are starting to boost their agility. Witness how the banks that have already started this journey were able to pivot far faster to offer government-backed loans. It’s vital that these banks hold their nerve until the full payback begins to flow.

Trend 3: Digital ROI is the name of the game

As commercial banks ramp up their digital investments, leadership will expect a return. To help, many banks are launching smaller, targeted initiatives to reap quick benefits and justify the ongoing investment. These initiatives should complement building out the broader digital foundation. Examples might include collaborating with a FinTech to feed customers’ accounting data straight into bank loan or credit risk systems or introducing e-signing for agreements.

Trend 4: Digital experiences: Your clients are taking notice

As users of retail banking ourselves, we’re all familiar, to a greater or lesser extent depending on our bank, with the seamless experience of omnichannel digital banking services. Business banking customers now expect the same – such as being able to start an interaction with the relationship manager and finish via mobile, or vice versa. Digital also lets commercial banks provide smaller customers with insights, product expertise and a degree of personalisation previously available only to large corporates.

Trend 5: From data experiments to actionable insights

Banks with the right foundations in place – see Trend 2 – are giving their relationship managers data-enabled tools and insights that let them boost profitability while also providing an enhanced customer experience. Examples include analyses of pricing and profit across the portfolio, benefiting the bank and enabling a more responsive and personalised service.

Trend 6:  Every business is a FinTech business

While “business banking-as-a-service” isn’t yet mainstream, and banks will never be supplanted completely, technology companies are seeking to make inroads. Banks need to be aware of the threat of disintermediation from customers and – see Trend 4 – be sure to provide them with the digital experience and engagement that will keep them on board.

Trend 7:  Responsibility gets real

Especially in the UK and Europe, banks’ social and environment credentials are under scrutiny as never before. Increasingly, the focus is not just on banks’ own impacts, but on those of the companies they work with and lend to. We’re seeing more and more banks build sustainability scores into their lending decisions, and even get in the front foot by offering a premium to socially responsible companies and lending opportunities

Trend 8: From disruption to distraction

This trend plays to the executive’s comment I mentioned at the start. As we emerge from the pandemic, banks need to manage the large – sometimes questionable – loan books they built up during it. And with a “K-shaped” recovery, they must play their part by understanding which customers have reinvented their business models and are well-set for the rebound, and which will need help and possible restructuring.  Furthermore, they’ll need to do all this while continuing to invest in their own digital future.

The message from these eight trends? For commercial, banks – like every other type of business – the pandemic has been a testing time. But for those that focus on the right priorities now, the opportunities are massive. It’s time to seize them.

To learn more about the top commercial banking trends visit the Accenture website:Read report

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