What can treasurers learn about digitisation and innovation from their banks?

by Marion Reuter, Regional Head of Transaction Banking Sales, Europe, Standard Chartered Bank

Published: 13 October 2020

Throughout the Covid-19 crisis, treasurers have proved resourceful, proactive and often pre-emptive in supporting their organisations’ liquidity and risk management needs. The lessons learned throughout this period, not least the business-critical power of digital technologies, are now informing treasurers’ priorities as they anticipate post-crisis working practices and business models that have digital at the core. Our experiences at Standard Chartered echo these same priorities. We are investing heavily in the organisation, processes and technologies to embrace digital transformation within our own business. We have also launched a variety of new digital businesses to better support clients as they reimagine their own business models. These experiences are resonating strongly with our clients as they deal with similar questions, challenges and opportunities.

Looking beyond the day-to-day

Marion Reuter, Regional Head of Transaction Banking Sales, Europe, Standard Chartered Bank

As business continuity plans were activated early in the Covid-19 crisis and employees moved to homeworking, treasurers rapidly shifted to digital signatures, processes and controls. At the same time, they have been closely involved with the development and execution of the company’s digital business models, helping to reshape or even transform the way that companies engage with their suppliers and customers, buy and sell, pay and collect.

Given that our own dilemma is similar, one thing we have found is that it can be difficult to think differently about the business when people are enmeshed in the day-to-day business, caught up in legacy processes, technologies and mindset. We overcame this by creating a dedicated innovation hub, SC Ventures, as a principal of change. By investing in, inspiring, partnering and incubating new innovations within a dedicated business, we give ourselves the freedom to rethink and rearchitect banking without being hampered by day-to-day issues and vested interests. Likewise, treasurers who build dedicated, cross-functional innovation teams, that include skills and expertise derived from outside treasury, can find it easier to identify points of friction and new ways to engage and support the business.

The value of partnerships

A year on since SC Ventures was first founded, the innovations we are introducing to the market reflect a new and fresh view of what banking means to us and to our clients, combining the agile thinking and new perspectives often associated with fintechs, with the integrity and experience of the bank. For example, we have now launched digital banks in 10 countries, creating a new model of banking in many parts of Africa, as well as in Hong Kong and Singapore. In Hong Kong, for example, we have pioneered digital banking as an early holder of the new virtual banking licenses. Our new bank, Mox, is a new virtual bank created in partnership with a leading telco and online travel company. This is a flagship example of the value of integrated ecosystems that extend beyond traditional industry borders to meet the changing needs of customers that have digital at the core. For treasurers too, looking beyond traditional internal and external relationships, and familiar techniques, can give rise to new ways of supporting the business, and innovative ways to harness data to make better decisions.

Reimagining the customer relationship

For Standard Chartered, digital banking goes further than our existing customer interactions, leveraging our expertise, technology and reach to facilitate a wider industry transformation. For example, we are seeing a strong trend amongst companies of all sizes to enable rapid, convenient and secure access to technology through software-as-a-service and cloud computing. We wanted to mirror this transformation in banking. In March 2020, we launched our ‘Banking as a Service’ solution, nexus. Through nexus, digital platforms and ecosystems such as e-commerce, social media or ride hailing companies, can offer loans, credit cards and savings account solutions to their customers under their own brand name, co-created with Standard Chartered. In Indonesia, for example, which has the world’s highest e-commerce rate globally, we are partnering with a major e-commerce platform to co-create and launch products powered by nexus in 2021. This is a powerful means in which we can reach Indonesia’s large unbanked population, and deliver services in a way that is intuitive and integrated with customers’ day to day lives.

It is not only individuals who are seeking an integrated experience in the way that they engage and do business, companies are seeking the same ease and convenience. For a bank, this means rethinking the way that we enable clients to access our services. In 2019 we forged a flagship partnership with SAP Ariba to embed financial ‘microservices’ into the world’s leading supply chain management system. As a result, buyers using the Ariba network can manage their payments and supply chain financing needs directly through the SAP Ariba digital platform, as opposed to sourcing these services separately. Likewise, suppliers have quicker access to financing and foreign exchange via our global network.

Making digital connections across borders

E-commerce is becoming increasingly international in its reach, with 21% growth in cross-border e-commerce between January and June 2020 compared with the same period in 2019 . As a result, demand for integrated FX services is growing to enable companies to sell to customers in their home currency without adding complexity and risk in cash management and FX. To achieve this, we have used application programming interfaces (APIs) to deliver real-time streaming and execution of FX rates linked directly into clients’ customer portals and internal systems to create a fully automated cash and risk management environment.

Treasurers are key agents in their companies’ digital transformation endeavours, both in the way that internal financial processes and decision-making is conceived and executed, and in enabling the company’s wider digital agenda. Treasurers can help shape tomorrow’s digital business models by supporting digital payment and collection methods seamlessly to enhance the customer experience, analysing changing cash flow dynamics, helping to streamline and accelerate supply chains, and managing “just in time” liquidity. Digitising existing ways of working and thinking will deliver some benefit, but will not be transformative in its impact. Instead, by conceiving entirely new ways in which the company operates and engages with its wider ecosystem, with digitisation at its heart, treasurers can help shape the company, or even the industry, of the future.