Finastra, a global provider of financial software applications and marketplaces brought together leaders from banks, financial institutions and technology companies for its corporate banking event series hosted in Dubai and London. The series included a range of talks and panels to discuss the trends, challenges, and opportunities facing financial institutions, with a focus on digitalization and automation, the current landscape of environmental, social and governance (ESG), and the impact of artificial intelligence (AI) for the future of finance.

The speakers included leaders from Finastra’s Lending business unit, such as Lekshmi Nair, CRO and Steven Moe, CTO, as well as from institutions such as Microsoft, IBM, Neudesic, an IBM company, and Qatar International Islamic Bank. The events were sponsored by Genpact, Veripark and Tesselate.

Key takeaways from the series include:

• Cultural change needed for technology adoption: In a challenging inflationary and interest rate environment, corporate lenders must focus on straight-through processing (STP), bringing settlement times down and making the market more effective and liquid, while meeting increased demand for commercial banking to reflect retail experiences. When it comes to trade finance, the hurdles are almost the same as they’ve always been: compliance, digitization and enhancing user experiences. The technology to solve these industry challenges already exists. However, the appetite to effectively utilize that technology requires a behavioral change in many traditional institutions.
• Modernization is crucial for growth: As transaction volumes rise – particularly with syndicated loans – lenders must modernize their technology architecture. This paves the way for digital transformation and growth, moving away from legacy systems and towards a reduced yet flexible technology stack. Through modernization, institutions can, for example, benefit from accurate and tailored pricing and product updates, automated underwriting and credit reports, and automated compliance with local requirements, such as Sharia Law. Third-party integrations and multi-cloud hosting are helping to drive this forward with speed and scalability.
• AI is not about technology, it’s about humans understanding how to use it: Banks must think about the real-world use cases for AI. For example, AI and machine learning (ML) can automate compliance checking, extract data from documents and utilize diverse datasets – such as climate data – to enhance lending processes and products without introducing new instruments. This facilitates real-time decision-making and action during client interactions. Generative AI’s value lies in creativity and analytical work, and it can play a big role in boosting productivity by empowering employees while driving revenue growth, cost reduction and risk mitigation.
• The need for common standards in sustainable finance: Sustainable finance remains a global focus, and the MEA region has seen significant growth in the issuance of green bonds in particular. However, with multiple sources of data globally, understanding and reporting on ESG risks – including in complex supply chains – and setting targets is challenging. Regulators, banks and industry bodies must work together to implement global standards and best practices, which will also help to tackle the growing fears of greenwashing.
• Collective action required to tackle the SME finance gap: Despite market volatility, growth in SME lending and sophisticated lending solutions in the MEA region persists, contributing to economic growth. However, globally, SMEs still face barriers to accessing credit. Collective action from banks, fintechs and technology providers is needed to drive interoperability between platforms and proprietary systems, and to simplify, digitize and enhance lending processes for greater inclusion.