• Ankit Shah, Head of Digital Banking at Apex Group


• 10.05.2022 11:00 am
digital banking

The recent crisis in Ukraine is posing new challenges for global economic systems, from commodity and FX markets to supply chains, with the domino effect of intra-national dependencies on companies in the Ukraine region already being felt. Moody’s recently reported that “the greatest risk facing global supply chains has shifted from the pandemic to the Russia-Ukraine military conflict and the geopolitical and economic uncertainties it has created.”  These factors, along with the lingering aftermath of the pandemic, mean that businesses are continuing to operate in highly uncertain times.

It is in these conditions of geopolitical and economic upheaval that digital banking will show the characteristics and benefits which set it apart from legacy predecessors, and help companies continue to grow and thrive. Here, we examine why in the current business environment, companies are increasingly calling for more efficient digital banking services that reduce costs and address the operational and continuity challenges of the post-COVID world.

Access

As the pandemic has shown, with lockdowns, shutdowns and border closures being imposed by governments, being able to readily access company bank accounts is the primary concern for business and finance leaders. While retail banking customers can pick up a smartphone and easily transfer money, pay bills and open new accounts in minutes, many corporate customers can only dream of banking with the same speed and frictionless access.

In 2022, corporate clients – more than ever- need to simply and efficiently open accounts and manage their day-to-day transactions, including multi-currency global payments, accessed through a single online and mobile-ready dashboard. With uncertainty of access continuing, it is now increasingly clear that corporate customers need a secure cloud-based banking solution, which allows them to view and instantly access their accounts 24/7, wherever they are in the world.

Flexibility

For corporate banking customers in 2022, control and flexibility are two sides of the same coin. Innovative digital banks have the architecture designed from the ground up, to be flexible and customisable, to better meet the needs of these users.

As we have seen in recent weeks, with FX fluctuations and the ability to transact in multiple currencies is crucial. For example, EDB’s Digital Banking platform offers  clients with the ability to hold and trade up to 18 currencies and make payments in a further 15 currencies – both via SWIFT payment and local payments in key regions Europe (€), US ($) and UK (£) under single IBAN

Advanced digital banking platforms also offer automated money market fund sweeps in multiple core currencies to help their clients optimise their investment returns and effectively manage liquidity.

Meanwhile, in times of uncertainty, digital banking can provide additional comfort via customisable multi-level payment approvals to enhance control of what is being paid out of business accounts, with custom limits available for different users or members of a team. Transparency and accountability are also essential, with corporate clients requiring fully integrated digital reporting and statements and instant visibility with balances updated in real-time.

Security

As a result of the conflict between Russia and Ukraine, US and European regulators have warned businesses to prepare for an increase in the number of attempted cyber-attacks. Large businesses are being warned to bolster their cyber security resilience as there is an increased likelihood of attacks at this time, including from opportunistic hackers.

Whilst a digital bank may initially seem more vulnerable to cyber attacks due to its reliance on digital systems – often the opposite is the case. Digital banks due to its architecture and API driven solutions have been “designed for security” and often have more robust controls, defences and processes in place – when compared to traditional banks which have been “retrofitted” with legacy technologies, upgraded on a piecemeal basis. Processes such as secure login by two-factor authentication are built into the digital journey of a bank customer, offering additional precautions and security whilst risks are heightened.

Compliance

In March, the UK’s HM Treasury highlighted the requirement for "enhanced customer due diligence measures and enhanced ongoing monitoring in any business relationships with a person established in a high-risk third country or in relation to any relevant transaction where either of the parties to the transaction is established in a high-risk third country." How can digital banking help facilitate this enhanced level of compliance?

Through a paperless process, digital bank customers not only have an enhanced experience but also are afforded greater transparency over compliance processes. By directly uploading KYC/AML documents to a portal, and the use of AI technology to verify documents and video ID, partnered with independent data validation, compliance processes become simplified, transparent and easy to track. In fact, by digitising many time intensive manual process, the risk of human error in the compliance and onboarding process are minimised. Digital banks capable of using customisable cutting edge transaction monitoring tools to deal with constant threat of AML, CTF or sanction monitoring in the changing geopolitical environment.

Outlook

Digital Banking is well-designed to reassure clients and meet their evolving needs in the current atmosphere of uncertainty, driven by external geopolitical events. Corporate clients will be looking for digital-first providers who are leveraging innovative approaches to provide data, analytics and decision-making tools that not only increase efficiencies, but support business continuity and help to drive growth in an uncertain global environment.