I am a courier.
I’m not, of course. But go along with me for a second. I am a courier, and my client has asked me to deliver a parcel.
Now, here are some questions I’m not going to ask him:
Would you like me to transport it by plane? How about by boat? Or by car? Bicycle?
What fuel type would you like me to use? Jet A-1? Diesel? Unleaded? Raisin bran?
It’s not that these questions are necessarily irrelevant. I’ll need to make the call – and the right call will depend on the content of the parcel, how far it needs to travel and how quickly it needs to arrive. I’m certainly not going to pedal perishable goods 3,000 miles on my bicycle.
But, crucially, my client doesn’t care how I get his parcel there, so long as I do so on time and the contents arrive in good condition. So I won’t ask him these questions. I might ask him other questions (Where is it going? When do you need it delivered by? Are the contents perishable?) to determine the appropriate method and pricing, but I’ll keep the tedious stuff to myself. I think this is a reasonable approach and it’s one that can be seen replicated in analogous situations throughout the business world.
So here’s a question I will ask: Why doesn’t this happen in the banking world?
When a treasurer contacts a bank to make a payment, he is typically confronted with a diffuse range of payment options. ISO, MT, EFT, ACH, ANSI, NACHA – the list is almost endless. They all have their uses, but why should banks leave their clients to work out what they are?
At iGTB, our view is that they shouldn’t. We have a different idea of how transaction banks should operate and we call it “contextual banking”. Like my responsible courier, banks have ready access to all the information they need to work out what clients are likely to want to do with their cash.
Let’s keep things simple by looking at the fulfilment of a single invoice. Based on the invoice, the client’s accounts, and its historical behaviour, the bank can work out which account the money should be paid from and which method is most appropriate for sending it. This process can be automated – using APIs to harvest contextual data, and intelligent algorithms to calculate the optimal means of execution.
But why stop at execution? The same principle can be applied to the wider orchestration of a corporate’s finances. For instance, an intelligent system could use predictive analysis of current and historical trend data to identify when a treasurer is going to have a shortfall in a particular account. From there, it can determine the best way of dealing with the situation – perhaps via a sweep or inter-company loan.
This represents a quantum leap from current banking practices – and not just in terms of bringing banks’
customer service into the 21st century. It also has the potential to drive revenue directly. Contextual banking recommendations needn’t be limited to options within the client’s existing services agreements – whenever a need is identified by the system, it can identify the best option from the bank’s entire product range, opening up the potential to up- and cross-sell.
Up until now, banks have been missing two things. The nous to put their existing sources of contextual client data to good use, and an acute focus on what their clients really want from banking services. Crucially, the latter has nothing to do with traditional banking products and everything to do with real-world outcomes.
At Sibos, we at iGTB will be demonstrating our new cash management and payments platforms, set to bring banks up to speed with the demands of modern business. Fully digital, and programmed to be integrated into any channel, device, product engine or third-party system, these platforms use contextual data and predictive analytics to output simple recommendations for complex decisions. Come see us at our stand and see how you can think like a courier – and deliver.
Michel Jacobs is Global Head of Sales and Head of Digital & Payments
Michel Jacobs's blog
iGTB's Contextual Banking Experience Platform (CBX) is a white label digital banking platform and product processors to manage corporate’s cash, liquidity and trade leveraging Machine Learning and predictive analytics, delivered through APIs and an omnichannel User Experience.