Many digitization projects in the financial sector fail because their complexity is underestimated, or the wrong technological setup is chosen. Thomas Bohn from IBM and Stefan Engl from knowis share their experience and provide practical recommendations for a successful digital transformation in banking – both from business and technological perspective.
"Those who deal with trends early on have better prospects of not being overrun by them." This is how presenter Janis Moutafis introduces the webinar 'End-To-End Digitization of Corporate Credit' (which is only available in German). Both speakers Stefan Engl, CFO of knowis, and Thomas Bohn, Principal Digital Business Automation and Open Banking at IBM Germany, underline this statement at several points during the recording. Both of them draw on a wealth of experience from numerous successful projects and many years of insight into the market. Focusing on the example of the transformation of the corporate credit business, the presenters outline the opportunities arising for financial institutions from digital transformation, the role of platforms in this context, and the reasons why a strong customer focus is the most important foundation of any modernization project.
Achieving an End-To-End Lending Process
In most cases, institutes already have the necessary data for the digitization of processes at hand, Engl describes the initial situation of many transformation projects. However, according to Engl, it is an essential problem that this data is collected in heterogeneous system landscapes and is hence only available within certain channels. For many banks, the cross-channel end-to-end process involving the customer is therefore virtually impossible to achieve with their historically grown system landscape alone. Nevertheless, banks are seeking innovation to improve the customer experience, reduce processing costs, increase speed and meet regulatory requirements.
Stefan Engl argues that successful modernization always requires a clear division of the business domains; only in that way is it possible to systematically achieve improvements and produce rapid results step by step. Particularly in corporate lending, the complexity of the processes and underlying data is significantly higher than it is in consumer lending. This is also one of the reasons why most digitization projects in the area of corporate credit do not lead to the desired success. Often the planning is already wrongly based exclusively on 'sunshine processes', as Engl calls them: on simple, clear procedures and decisions, which turn out to be much more complex and diverse in reality than originally assumed.
In the first part of the banking webinar, Stefan Engl explains in detail how to address this complexity in the digital transformation of corporate lending, how to reduce process costs and what is the best way approach a digitization project from a business point of view.
Customer First – Customer-Focused Financial Products Through Platform Technology
Thomas Bohn then points out that the most important goal for any financial institution must ultimately be to improve the customer experience and meet the expectations customers have of a modern bank. This increases the bank’s relevance towards customers and helps it achieve a competitive advantage. In this regard, multi-channel banking is one of the fundamental instruments, as it allows to create the necessary openness and transparency and to actively involve the customer in all credit decision processes.
Bohn explains that banks must also integrate the customers' ecosystems into the banking processes in order to develop modern financial products and open recomposed value chains. Integrated supply chains, connection to the customer's ERP system to trigger automated processes, or dynamic financing based on production data are just a few of the examples mentioned in the webcast. The use of business services across all channels, both internal and external, ensures efficiency through reuse. Bohn is convinced that a financial institution’s long-term success depends to a large extent on its ability to sustainably integrate new technologies into its processes.
In the second part of the webcast, Thomas Bohn outlines the specific fields of action for a digitization project in the financial sector and how platform technology can be used to map the business logic, thus improve the customer experience and consequently create a competitive advantage.