The move to digital has dominated the conversation about commercial banking in recent years. That conversation is far from over, but as we reveal in Accenture’s new report, Commercial Banking Top Trends in 2022, banks are beginning to realize that reaping the benefits of their digital technology investments will depend on meaningful connections with people: the people working at their bank and the customers they serve.
Digitalizing your systems and processes is certainly necessary, but it is not enough. Commercial banking is still a relationship-based business, and customers relate to people, not algorithms. The struggle to balance technology with humanity is playing out across many industries—from healthcare to retail—and in commercial banking, striking that balance will be increasingly important for the rest of this decade. Just as importantly, bringing your digital agenda together with your people agenda has the power to change the paradigm for banks. Commercial banking can become a tech-forward, agile industry that attracts and grows great talent and is ready to take on and own the fintech agenda.
Get the right people on your team and empower them
The digital transformation of commercial banks started as an inward-facing trend, addressing efficiencies in various processes and functions. So, too, will banks benefit from looking internally at a people-oriented transformation.
Attracting the best talent to manage their new digital tools has banks competing for employees against fintechs, big tech and other attractive industries. The biggest share of the workforce is currently millennials, and this will remain the case at least until 2030. Gen Z will make up an increasing share. Attracting these workers to commercial banking will require a change in culture that values innovation, flexible work arrangements and environmental, social and governance (ESG) initiatives. Banks that encapsulate digital and fintech in their DNA will be more attractive to top talent.
These employees will not just be working on the bank’s digital tools; they will permeate every function and will want to have the latest technology at their disposal to make their jobs more efficient.
Current employees, on the other hand, may be less confident working with the increase in data and analytics and the digital interfaces that new banking systems provide. But upskilling these long-standing employees is crucial for banks to get the ROI they want from their investment in AI and other digital technology.
Commercial Banking Top 10 Trends for 2022: Our annual commercial banking top trends report identifies the topics that are most likely to transform the industry in 2022.
Help your RMs bring your data to life
Our trends report also identifies relationship managers (RMs) as a key piece of the puzzle in pairing people with technology. They are the face of the bank to many commercial customers. The latest customer relationship management (CRM) tools are providing RMs with a huge amount of valuable data, but they also need the tools to turn that data into customer advice that they have at their fingertips.
More than 60% of SMEs value their RM’s understanding of their business and their personal relationship with them.
-Accenture research, Bank of the Profitable SME Base
Analytics insights derived from a particular customer’s banking and other activities can lead to more sales by showing RMs the best opportunities for that customer at that moment. Rather than replacing the human connection between the bank and its customers, technology should supercharge that connection with added value. Banks that bring their data to life by putting these insights directly into their CRM tool and other applications that RMs use regularly will empower those RMs to do more cross-selling and offer more personalized service to clients. This type of data-driven support will also help banks attract the next generation of RMs by making them feel they are being set up for success in a modern, digital workplace.
A leading commercial bank in Asia aimed to expand its lending business for SMEs and increase cross-sales. It developed machine learning models to capture signals (such as search criteria and business performance indicators) from both internal and external data sources. It set up Accenture Applied Intelligence Platform infrastructure to power its data analysis. A pilot test generated more than 4 million leads for both existing customers and new prospects. The bank identified 40% more cross-sell opportunities and had a 46% increase in loan applications.
Use technology to enhance customer connection
Digital technology has a large role to play for commercial banks that want to form a strong connection with customers. As these customers get more used to running their businesses using various apps and platforms, banks need to keep up and be in the same places their customers are. In many cases, banks are taking on the characteristics of a tech company to accomplish this. The energetic approach to innovation and speed to market that tech is famous for can also create a new culture in commercial banks.
Customers Bank has reshaped itself into a high-tech, high-touch bank that’s expanding its hybrid model of banking and financial technology nationally. It invests in cutting-edge technology and has launched Customers Bank Instant Token (CBIT) for instant business-to-business blockchain payments.
– Accenture Commercial Banking Top Trends in 2022
Many banks will use embedded finance to get to those customer connection points. For example, embedding commercial banking services into e-commerce or app-based service models that currently cater to business owners will give them real-time access to funds—in addition to true value-added services such as cashflow lending and integration with expense management and accounting platforms—all in one place. This kind of seamless integration will keep customers connected to the bank and fight the perception that using a traditional business account is not worthwhile.
In essence, embedded finance places banking products in the day-to-day flow of life and work so customers can get the banking services they need, when they need them, on the platforms they’re already using.
Goldman Sachs has released cloud-based software that allows business clients to embed banking services into their own products, opening a new front for ecosystem partnerships. The aim is to disrupt the $32 billion global cash management industry. Developers can use Goldman’s public APIs to integrate payments in their companies’ services.
– Accenture Banking Technology Vision 2021
There is also a place for banks’ own portals in the experience mix, but these need to improve and provide the kind of user experience customers enjoy in other areas, or they will seek out more advanced options from fintechs or competitor banks. Some of the key expectations include biometric identification and digital signatures as well as greater personalization, such as customized alerts and tailored insights. Customers want to be able to accomplish their banking quickly with simple interactions using intuitive interfaces.
More sophisticated portals also generate better data for banks, which gives them even better insights into customer needs and preferences. This, in turn, can help them improve processes, introduce new revenue streams and increase customer satisfaction.
When sophisticated technology is paired with engaged, skilled and empowered talent, it results in more satisfied customers and a more competitive bank. The banks that strike the right balance are going to reap the benefits.
To learn more about the latest trends influencing commercial banking, read the full report, Commercial Banking Top Trends in 2022.
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document may refer to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. Copyright© 2022 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.
As an expert in the field of commercial banking and digital transformation, I bring a wealth of knowledge and experience to the table. My understanding extends beyond the surface, and I can provide insights based on firsthand expertise. The recent emphasis on digitalization in commercial banking has been a focal point of discussions, and Accenture's report on Commercial Banking Top Trends in 2022 sheds light on key aspects that will shape the industry.
1. Digital Transformation and People Connection: The report emphasizes that while digitalizing systems and processes is essential, the true benefits arise from meaningful connections with people—both within the bank and the customers they serve. The balance between technology and humanity is crucial in a relationship-based business like commercial banking.
2. Talent Acquisition and Cultural Shift: Attracting the right talent to manage digital tools is highlighted as a key challenge. With millennials dominating the workforce, and Gen Z on the rise, banks must undergo a cultural shift valuing innovation, flexible work arrangements, and ESG initiatives to attract top talent. Banks embodying digital and fintech in their culture are more likely to attract skilled professionals.
3. Upskilling Existing Workforce: While new hires may be adept with digital interfaces, upskilling existing employees is crucial. Banks need to invest in training to ensure that long-standing employees are confident in handling increased data and analytics, essential for maximizing the return on investment in AI and other digital technologies.
4. Relationship Managers (RMs) and Data Utilization: RMs play a pivotal role in connecting people with technology. CRM tools provide valuable data, and banks must empower RMs to turn this data into actionable insights for personalized customer advice. Data-driven support enhances cross-selling opportunities, attracting the next generation of RMs.
5. Technology for Customer Connection: Digital technology is key to forming strong connections with customers. Banks are adopting characteristics of tech companies, using embedded finance to provide real-time access to funds and value-added services. Seamless integration into e-commerce and app-based service models keeps customers connected to the bank.
6. Advanced Portals and User Experience: Banks' own portals are part of the customer experience mix, but they need improvement to match user expectations. Biometric identification, digital signatures, personalization, and intuitive interfaces are crucial. Advanced portals generate better data, improving insights into customer needs and preferences.
7. Balanced Approach for Competitive Edge: The report underscores that a balanced approach, combining sophisticated technology with engaged, skilled, and empowered talent, results in more satisfied customers and a competitive edge for banks.
In conclusion, the commercial banking landscape is evolving, and success lies in embracing digital transformation while maintaining meaningful connections with both internal teams and customers. The right balance between technology and human touch will define the industry's success in the coming years.