Why financial institutions need fintechs to stay in the game

By Jacques de Jong, Global Head at Bolero

Today’s financial institutions focus on their customers’ needs for clarity, efficiency and security.

Despite the high cost and complexity traditionally associated with enterprise portals, banks have been slow to adopt software-as-a-service models to help them better manage their budgets.

Banks that are leading the way in facilitating digital trade services and prioritizing support for digital trade are using innovative fintech to create fast, future-proof solutions.

For future-proof trade finance communications, these are the top priorities major banks are considering and some of the factors that have driven financial institutions to seek solutions from external vendors.

Deliver a transformed digital user experience

With Trade Portal as a Service solutions, banks are now able to enable their trade customers to not only transact, but also be able to manage entirely directly from a single portal application, advising as well as using electronic documents.

Many of the world’s largest financial institutions are unable to offer a fully digitized service to their business customers due to the immense cost, time, and complex implementation processes required to deliver a fully digitized user journey. But with advances in recent technologies like Bolero’s Galileo, banks are well positioned to provide their customers with truly digitized experiences to run their business quickly and efficiently.

The pandemic has exposed the inefficiencies inherent in trade finance operations and as a result, the demand for digital trade services is at its peak. Commercial customers today want to conduct their business online, so it becomes vital for banks to digitize the customer experience as quickly as possible or risk losing that customer.

Overcome the shortcomings of current portal solutions

Due to companies digitizing their trade finance processes, banks have come under significant pressure to provide new and improved digital services to their corporate customers who are pushing for a fully digital experience.

Some of the banks we spoke to told us that their existing portal solutions no longer meet the requirements of their customers.

Businesses today are looking for solutions that can adapt quickly and flexibly to new requirements so that they can offer their enterprise customers a quick and smooth transition from the old to the new, more innovative systems. They can manage their trade finance transactions as well as all correspondence between their trade customers and banks electronically.

Avoid prohibitive ownership and maintenance costs

Many banks consider the total cost of ownership of a business portal to be prohibitive and as a result they are hesitant to provide an enhanced customer experience. This reluctance is holding back adoption despite strong demand from their business customers.

A turnkey, subscription-based solution can reduce the cost of prospecting, which in turn lowers the cost of acquiring new customers while reducing the need to hire support staff who create upgrades or ensures compliance with regulatory changes.

Banks that replace their legacy systems with a cutting-edge technology platform can offer their customers a more sophisticated digital experience at a lower cost than they would have paid before.

That’s not all, for smaller, more regional banks that don’t have a lot of commercial customers, the effort and resources associated with installing a portal solution for their customers is often not worth it. . A plug and play solution opens the market to financial institutions of all sizes.

Protect against technical debt that hinders innovation

Technical debt discourages banks from building bespoke applications because they don’t want to deal with the costly maintenance required after a system is built.

Many banks have changed course to adopt white label solutions, which reduce costs and free them from the burden of constant updates for their business customers.

By upgrading their online banking platforms and making changes to improve the customer experience, they are encouraging innovation in a booming industry without having to deal with the technical burden of developing the new platform in-house.

Supporting an end-to-end digital experience for businesses

Many legacy portals that banks use today do not allow corporate customers to manage their own business transactions and products such as letters of credit, guarantees, electronic bills of lading and standby letters of credit.

As corporate customers increasingly require their business partners to embrace digitalization and increasingly rely on technology to conduct their business, banks are rising to the challenge by offering enhanced user experience, enhancements and a wide range of connectivity options.

Structured banking communications and audit trails

Structured banking communications and audit trails between banks and customers are very important. Banks have a responsibility to ensure that their communications with customers are structured and clearly defined in order to avoid any ambiguity or uncertainty. It is also important that the correct parties respond to the communication in a timely manner, so that there is a proper audit trail for everyone involved.

For example: On many occasions we have seen cases where a customer receives a notice from the bank but does not respond immediately. In some cases, the client may not be aware of the deadline or may not know what action should be taken following receipt of this notice. Lack of proper structure and clear messaging can often lead to delays in responding to bank requests.

Improved connectivity and customer loyalty

While the demand for multi-bank trade finance solutions has more than doubled in recent years, a growing number of businesses that use the services of multiple banks are finding it inefficient to work with each bank on an individual basis.

Big companies have the bargaining power to dictate to their banks which formats they should use, but for smaller companies buying or building a multi-bank solution can be expensive – and then they convince their banks to work with.

The growing demand for multi-bank solutions presents a difficult obstacle for many banks to focus on customer needs.

In conclusion, a black swan event has forced businesses to adapt to new technological standards, creating chaos and new business opportunities. Banks need to do the same to keep up.

Marianne R. Winn