Digital Corporate Banking in South Asia

With online retail banking on the rise in South Asia, now digital corporate banking applications is bringing new innovations to the business sector of the region.

Technology advancements have introduced numerous conveniences to our lives and business practices. One such avancement being digital corporate banking. Many services such as banking, auditing, analysis, and training now can be performed through digital mediums. And the forced change of the business landscape by the COVID-19 pandemic has only reassured the inevitable shift to digital platforms.

Digital banking services have been rising all over the world, and have risen exponentially recently due to the pandemic. Mobile banking services have allowed users access banking services that were once required for individuals to visit the bank in-person.

Corporate banking has also entered the digital medium, but in many countries in Asia it still remains at its old-school ways. So a corporate banking mobile application is the solution that can bring new areas for innovation for the fintech industry, and we at  Brain Station 23 have pioneered the way in Bangladesh.

Why use a digital corporate banking app?

A glaring reason why businesses should shift to digital corporate banking applications is the COVID-19 situation that has disrupted the life we used to know. Now businesses are being forced to adopt remote working practices. And already there has been a rise of many digital solutions that works well with the ‘work from home’ business model and allows regular business dealings from the safety of an individual’s home.

And in our home country, Bangladesh, people are still forced to go out in public when it comes for business transaction dealings. And that is the case for many countries around the world. So digital corporate banking solutions are much needed for the local businesses.

The key takeaways of such applications are-

  • Creating convenient medium for business transactions
  • Helping to promote FDI and global transactions
  • Automating corporate banking services

Then the ever-present scope for improvement has always loomed when it comes to technology and business. Businesses that operate on an international level will surely opt for digital corporate banking applications, otherwise it will seriously hinder them in the long run. Digital corporate banking solutions facilitate process automation and efficiency- which helps businesses to run effectively.

In June 2020 alone the monetary worth of online transactions were 7.5 billion BDT.

According to LightCastle Partners, a leading consulting agency in Bangladesh, in June 2020 alone the monetary worth of online transactions were 7.5 billion BDT; and that is only from the retail banking applications. Bangladesh has yet to establish a digital corporate banking application, so many businesses are forced to use retail banking applications or handle their banking services in-person. This leaves a huge scope for corporate banking services both within and outside the country.

At present times, Asia has taken lead in the global banking and financial services- China playing the key role of this. According to an article in Asian Banking & Finance, the Asia-Pacific region has been generating 43% of the global banking revenue. And not only China, but countries such as Bangladesh, India, Malaysia, Philippines, Indonesia, Thailand, and Vietnam are introducing new innovative digital corporate banking services to help economic growth and attract FDIs. The prominent forces behind the relevance of digital corporate banking are digitization and globalization. These two phenomena have forced financial managers in Asian corporations to adopt new practices in forecasting, budgeting, and risk management with technology-driven approaches. With increasing economic challenges, stricter regulations, and ever-present threat on cybersecurity- the fintech industry in Asia is forced to come up with innovative solutions to help businesses work and compete with their western counterparts.

When focusing on our country specifically, a robust digital corporate banking solution is needed to fulfill the Digital Bangladesh goal set by the government. One of the key contributors to this initiative is to bring more foreign direct investments (FDI) to help Bangladesh grow. A research by LightCastle Partners shows up until the COVID-19 pandemic, Bangladesh was earning as high as 3.89 billion USD in FDI. One of the biggest struggles to attract FDI invest, and also help enterprises to thrive, is the lack of infrastructure. A digital corporate banking solution will tremendously favor the Bangladesh economy- giving global MNCs to carry out their multi-million dollar transactions with no hassle and also help local enterprises to carry out huge transactions both in the country and abroad.

A robust digital corporate digital banking application will have intuitive dashboards and analytics features to help the managers who would be using the application to get a holistic view of their business transactions- whether it is for large enterprise or proprietorship. And managers or decision makers of a business can transfer funds automatically, and even in bulks. This helps to pay off salary transactions, utility bills, and other running costs with a push of a button. And to adhere to global regulations, there are global transaction limits and security features such as biometric authentication and retina scan. We at Brain Station 23 go above and beyond to deliver the best digital solutions in order to strengthen our country’s infrastructure- by building digital corporate banking solutions around existing business practices and integrating innovations such as ERP integration and AI chatbot.

Source: Brain Station 23

Looking in to the future of digital corporate banking

An article from the Boston Consulting Group indicates that digital banking systems- whether its retail or corporate- will be heavily disrupted by further technological innovations. Specifically by artificial intelligence and blockchain technology.

This is no surprise considering that since both AI and blockchain are the next phase in digital banking due to the security and automation they bring to the banking system. And having a digital medium has become a standard practice for banking services for the past couple of years. But this does present a lot of challenges for the present banking practices. As technology evolves at this rapid pace, banks would be forced to reinvent their customer journey model and design a business model which is digitally feasible. At present, countries such as Malaysia, Singapore, Cambodia, Laos, and Philippines are leading the charge for innovations in the digital banking sector in Asia. We at Bangladesh are not far behind, but not advancing and utilizing digital innovations will still leave a gigantic gap in our infrastructure.

To give a perspective in the Asian continent, The Straits Times, a news outlet from Singapore has noted that there are over 200 banks worldwide that are operating on solely digital basis- are worth $15 billion USD as of late. And one-fifth of these banks are based in Asia. Even many non-financial companies such as Singtel and Grab are investing in digital banking mediums. This possess threats to established banking institutions serving corporates, as any significant disruption can easily outgun the traditional corporate banking services- a situation which is plaguing the retail banking sector as of late. So banks are adopting digital mediums and technologies to help them survive the global disruption of banking services.

Like many countries in Asia, Bangladesh relies heavily on FDI and global business dealings for economic growth. So to accommodate enterprises in Bangladesh, a digital corporate banking solution will strengthen the business sector of our country. And not only that, we have room for innovations and to introduce something new to the existing digital corporate banking system. According to Oracle, only 49% of corporate banking users were satisfied with the banking services. And only 8% of the banks are actually catering corporate banking services. Oracle pointed out that with the opportunities of automation, agility, and capital management that a digital medium brings, 79% of banks would have to change their way of operations. And those numbers are only from the western hemisphere of the globe!

So this leaves a huge opportunity for Bangladesh to innovate the digital corporate banking game. And we at Brain Station 23 have already cooked up the solution that can help banks to serve their corporate clients. With this, we hope to see Bangladesh leading the future in global fintech and banking services, bringing world class innovations from our little corner of the world.

Reference

  1. Deep Dive into FinTech Innovation in Bangladesh – LightCastle Partners
  2. Tech-Driven Next-Gen Corporate Banking: Trends and Implications in APAC and Japan – Asian Banking & Finance
  3. FDI Inflow in Bangladesh: Time to Rethink and Redesign Policies – LightCastle Partners
  4. Corporate Banking – Boston Consultant Group
  5. South-east Asia has much room for digital-only banks to grow: Report – The Straits Times
  6. It’s Time to Get Serious about Digital Corporate Banking – Oracle
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