These new services have been largely driven by fin-tech companies, and include mobile wallets, digital payments and robo-advisors, as well as integrating blockchain technology and consumer apps. Despite their successes in transforming consumer and transactional banking for the current climate, many other banking segments, like wealth and asset management, and investment banking, have been left in the lurch.
If banks are to remain relevant in these rapidly-evolving technological times, it’s crucial to look beyond just transactional banking and do some strategic planning which considers how all the parts of the industry can evolve to ensure future-readiness.
Banks Can Become Part Of The Solution
Of course, innovations in this particular sector don’t only have to come from fin-tech companies. An excellent example of how entire new banks can been brought to life, driven by an innovation agenda, was the recent partnership between Anglo-Gulf Trade Bank, Publicis Sapient—the digital business transformation hub of Publicis Groupe—and Microsoft, to support the launch of the world’s first end-to-end digital trade bank. Anglo-Gulf Trade Bank (AGBT) will offer a transformational service in the sector by providing a superior client experience and addressing the challenge of creating a revolutionary digital banking solution that helps bridge the trade finance gap. Trade finance is an example of a banking segment that has, until recently, only been an option for the few—mostly large multinationals—leaving a trade-financing gap of around 1.5 trillion dollars worldwide. This gap implies a tremendous loss of economic growth potential for many developing countries, amongst other things. The United Nations’ 2030 Agenda for Sustainable Development recognized international trade as an engine for inclusive economic growth and poverty reduction, and an essential means to achieve their Sustainable Development Goals (SDGs). Even though the average annual growth rate of real GDP per capita worldwide is increasing year on year, there are still many countries in the developing world that are decelerating in their growth rates and moving further away from the 7% growth-rate target set for 2030. Increased commitments to trade and banking will help increase productivity and reduce unemployment levels in the world’s most impoverished regions. According to Daniel Gould, Deputy Chief Executive Officer of Anglo-Gulf Trade Bank, “AGTB is rethinking and rebuilding trade finance. Our simplified and data-first approach develops a thriving partner-ecosystem and innovative value propositions. We set out to build a transformative trade finance bank that provides superior client experience, mitigates risk and delivers an integrated, real-time offering to clients.”Finding The Right Partnerships
By building a fully cloud-based and data-driven enterprise in partnership with Microsoft, AGTB aims to improve cross-border trade finance and stimulate collaboration within a growing trade ecosystem. Through this strategic partnership, they are ultimately joining forces to tackle economic growth and prosperity effectively. “Unprecedented changes in the financial services industry are mandating the need for transformation. This calls [sic] the sector to embrace technologies that combine intelligence and security while maintaining trust at the center,” said Sayed Hashish, General Manager of Microsoft UAE. An offering like this shows just how vital a customer-centric approach is, as opposed to merely creating products. In adopting this approach, AGTB aims to make trade finance accessible to a broader segment of enterprises, and no longer just multinational corporations. By overcoming barriers to conventional trade finance and banking, AGTB estimates that global GDP could increase by nearly 5% and trade by 15%.Anglo-Gulf Trade Bank understood the opportunity for a bank of the future to innovate its business model in parallel with building a digitally enabled, client-centric enterprise. Nigel Vaz, Global CEO of Publicis Sapient
Looking Ahead At Banking’s Next Great Innovation
There has been a lot of discussion around the opportunities for innovation in other areas of banking. One such an example exists within wealth management and private banking, and perhaps here too, there is a need for partnerships to ensure successful innovation that won’t get tied down by legacy internal structures that could be detrimental to their success. Right now, changes related to access to information and data portability, like OpenBanking or PSD2, might just mean that the rest of the banking world will follow suit and that banks, consultancies and fin-tech companies look at even more innovative products and collaborations. Successful innovations in the higher end of the banking world can not only help private investors and family offices look at their wealth in new ways, but perhaps even enable them to deploy it within areas that will also assist in achieving the UN’s ambitious global targets around sustainability.This post originally appeared on Simple.
