by Roger Vincent, Chief Innovation Officer, Trade Ledger™
Corporate customer onboarding has always been a challenge for any bank or lender. The complexities of navigating burdensome regulatory requirements alongside data aggregation and rigorous underwriting have all too often resulted in a customer experience that ends in a bad way for both bank and customer.
Most bank CEOs understand that getting a better view of their customers is the key to excelling, existing or even simply surviving. With increasing competition arising in this space and the world’s biggest tech companies investing $B’s into creating a more efficient or even automated workforce, we ask how banks can adapt, compete or partner in the world of robotic process automation and, more specifically, how will this impact the role of a relationship manager?
For many years now, companies have been using CRM systems from some of the big players as a way to track and manage the flow of information between the customer and the sales representative. The most common platforms are provided by the likes of Salesforce, Microsoft and Oracle but in order to truly understand how to approach the process of automating the role of a corporate customer, you need to have a slightly deeper understanding of what the role of an RM plays in a corporate bank – it’s certainly not just relationship management.
The role of an RM within a corporate bank is varied:
Affectionately known as the “rubber glove” moment, most companies at some stage in their time with a bank will need to go through the daunting process of having everything “checked out”. This process is very rarely an enjoyable one for either the customer or the bank and can often take weeks or even months to complete but nonetheless the process is necessary for a whole host of well-intended and highly regulated reasons but could it be made quicker; more efficient; more insightful and dare I say it more enjoyable than it is today – for all parties involved.
For most corporate banks, these processes are highly manual with very little in the way of automation. Hence the role of most bank RMs has historically involved the fulfilment of these processes through client calls, emails and meetings. In most cases hundreds, if not thousands, of interactions are required to effectively piece together a successful credit proposal. This, in turn, means the average loan application times for applying (time to decision) and sanctioning (time to pay) can easily extend to months; indeed the average application time for secured corporate credit in most banks is well above 60 days (across small corporates, mid-market and large corporate customers). But are things about to change.
Automation of processes and digitisation of products in corporate banking is heavily dependent on customer needs and the availability of data, insights and scoring mechanisms that support the credit application process:
A strategy that aims to digitise the entire end-to-end journey between customer and bank for all products will fail. A dynamic and event-triggered decisioning capability is required to ensure the right product is positioned in the right way to business looking for working capital.
There are three key areas that we see technology impacting the role of the RM over the coming 5 years. This emergence of technology is likely to coincide with a significant shift away from relationship-based customer origination to digital marketplaces and eco-systems, following hot on the heels of the retail and small business banking sector which is now heavily reliant on price comparison websites and search engines.
For the relationship managers out there thinking that they will come into work one day to find a robot sat at their desk, you can rest easy – for now anyway. The introduction of new technology in corporate banking is unlikely to directly challenge, threaten or indeed replace human processes within the lending journey overnight, the leap forward is simply too great – not for the technology itself but more so for the bank and most importantly for the customer. As technology, regulation, products and consumers adjust to the new world of data-driven lending, banks themselves must be in a position to start integrating technology into human processes to keep up with the staggering pace of change in the global lending market.
This gradual augmentation of relationship management with enabling technologies is something that only true enterprise-ready software platforms like Trade Ledger can support banks with. There is no doubt that the robots are coming but the opportunity for banks and lenders to embrace this revolution far outweighs the threat when it comes to the relationship management of your most important asset – your customer.