Why Financial Institutions Need Fintechs

Despite the high cost and high maintenance traditionally associated with enterprise portals, banks have been slow to adopt SaaS technology to help them better manage their budgets. Leading banks are leading the way in facilitating digital commerce services for their business customers and prioritizing support for digital commerce by leveraging innovative fintechs to create fast, future-proof solutions that can even support multi-bank capabilities.

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

The ability to deliver a fast digital commerce experience to customers

With Trade Portal as a Service solutions, banks are now able to enable their trade customers to not only transact, but over time to be able to manage entirely directly from a single portal application. , advising and 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 the pandemic has exposed the inherent inefficiencies in trade finance transactions and hence 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.

Dissatisfaction with their current portal solution

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.

Exorbitant ownership costs

For many banks, the total cost of owning a trade portal is prohibitive. As a result, banks are reluctant to offer their sales reps enhanced customer experiences because the setup costs are too high, slowing adoption of these services despite the incredible appetite of commercial customers.

The subscription-based turnkey solution reduces the cost of acquisition from millions to a fraction of the cost while reducing the need to hire teams to build solutions and to support customers by developing new upgrades and ensuring compliance with regulatory changes. By replacing their legacy systems with a cutting-edge technology platform, banks are able to deliver a more sophisticated digital experience to their customers 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.

Absence of technical debt

Technical debt often becomes a major deterrent to banks in their search for tailor-made solutions, as they do not want to deal with the costly maintenance of their business portals.

We see many banks changing course to adopting white label solutions that not only reduce costs, but free them from the shackles of constant updates for their business customers. They, in turn, provide upgrades to their online banking platforms and bring positive change to the customer experience and channel innovation into a booming industry, all without the technical burden caused by in-house solutions.

Ability to support digital commerce with electronic presentations

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 stand-by letters of credit.

As corporate customers become more demanding of their business partners to embrace digitization and increasingly rely on technology to conduct their business, banks are rising to the challenge by offering an enhanced user experience, enhanced features and a wide range of connectivity options.

Importance of 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.

Lack of connectivity for corporate customers and reduced 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.

To finish; a black swan event has created chaos and new opportunities for businesses, forcing them to adapt to a new technological status quo. To successfully navigate through the technological advancements being made, businesses are experiencing a renaissance and embracing new age technologies. Banks need to do the same to keep up.

About the Author: Jacco De Jong is Global Head of Bolero.

Marianne R. Winn