Digital banking is changing. An opportunity for institutional investors
Innovative ideas relating to topics such as open banking and the platform economy are driving the advancement of digital banking. How institutional investors could benefit from this development in the future.
The growing complexity of the modern world poses challenges for institutional investors. For example, new hurdles are presented by a plethora of communication standards and logins for various platforms, as well as fragmented markets and disruptions in complete digitalization (e.g. digital signatures, onboarding). The interpretation of payments and process statuses is naturally coming to the fore, since the large amount of data can make it almost impossible to hone in on the essentials.
Expanding digital banking for institutional investing
As a bank, Credit Suisse faces similar challenges to its institutional clients. "We therefore see it as an exciting challenge and our responsibility to combine the two dimensions – the advisory service (high touch) and a well-developed digital offering (high tech) – in an intelligent and scalable manner," says Reto Hafner, Head of Global Custody Change & Digitalization at Credit Suisse Asset Servicing.
According to Reto Hafner, there is an increasing shift toward client-oriented ecosystems. As such, banks must establish tailored experiences for all touch points throughout the client journey, so that they are able to offer clients a new level of customization and flexibility. "This is why we want to advance toward the platform economy, in line with the needs of institutional investors," explains Reto Hafner.
Potential steps toward the platform economy
Advancement toward the envisaged platform economy could unfold across four stages:
- A digital workbench that allows clients to quickly and easily access all relevant banking functions. The configuration should provide a single sign-on function and a role-specific view. The workbench could also be supplemented with integrated collaboration tools complying with the highest security standards.
- A dashboard focusing on performance and operational risks, with a clear distinction between notifications and pending interaction requests. Another possibility would be to aggregate the essential service statuses for the client and to have a KPI-driven view that directs the user to the important information.
- The opportunity for integrated workflows that are linked to rights and approval structures, which clients can define themselves. The integration of digital signature solutions and a sophisticated document management system with archiving solutions could also be included. An online self-service solution which can be accessed at any time, enabling easy access to the most up-to-date data (STP status), should also be a feature.
- Finally, the platform economy could allow flexible networking of clients and banking systems and feature an intelligent design enabling the integration of market standards such as open banking. The key aspect here would be to link third parties into the common ecosystem so that it is possible to implement the single sign-on function across companies in order to provide an integrated "extended workbench" for institutional clients.
Taking institutional investors along on the journey
It is essential to continuously coordinate with market partners and clients in the development process. This is the only way to ensure the acceptance of all parties involved at the end of the project. "We want to develop the concepts alongside our clients," the expert explains. The aim is to involve them into an open innovation model using an agile approach. "We believe this approach is the key to a genuine partnership with our institutional investors," adds Reto Hafner.