The 10 predictions from IDC’s inaugural corporate banking study are reflective of a major change underway in the sector as digitalization and internal DX escalate, while cognitive, connective, and analytical technologies develop in cloud, AI, and DLT fields. Meanwhile, the open banking and API trend promises new front-end, data-centric tools in the pricing of loans, trade finance, instant-payment route analytics, liquidity alerts, and so on, plus new services and market entrants. The pace of change will reach an inflection point in the next five years.
Top 10 Corporate Banking 2019 Predictions
IDC’s top 10 predictions for worldwide corporate banking, in chronological order and implying no greater or lesser importance, are as follows:
- Prediction 1. Cross-border payment tracking will be improved by the SWIFT global payments innovation (gpi) quasi-standard, but only 10% of banks on the network will monetize it by 2020 with their own extra data-rich analytics.
- Prediction 2. Corporate treasury participation in real-time payment (RTP) infrastructures will not top 10% by 2023, awaiting interoperability, but banks will be ready for them as RTP use cases evolve and transaction limits rise.
- Prediction 3. In 2021, 20% of tier 1 corporate banks will have invested in building platform capabilities to take on critical roles in the Internet-of-Things (IoT) ecosystem: machine-to-machine (M2M) payments, data-driven accounting, and cash optimization.
- Prediction 4. Spending in blockchain-based trade finance will grow at a five-year compound annual growth rate (CAGR) of 75.6%, hitting $669.9 million by 2022.
- Prediction 5. Enterprise payments to consumers (B2C) using electronic payment rails will surpass $20 trillion worldwide before 2021.
- Prediction 6. With the increase in financial accounts in developing markets, 33% of monthly consumer bills worldwide will be paid via electronic means by 2022.
- Prediction 7. By 2020, 10% of banks worldwide will have allocated at least 5% of IT budgets toward connecting corporate and retail banking core systems to improve credit decisioning for the small and medium-sized enterprise (SME) customer segment.
- Prediction 8. By 2021, 20% of tier 1 and 2 banks worldwide will leverage application program interfaces (APIs) and share at least three external corporate banking apps with peer financial institutions (FIs) for improved risk assessment, credit decisioning, and co-lending.
- Prediction 9. A fifth of corporate treasurers will be using artificial intelligence (AI) machine learning (ML) capabilities in 2023 supplied by their banks to support automated finance decision-making.
- Prediction 10. Advances in mobility, including smartphone, tablet, and other IoT devices, will improve treasury operational efficiencies by 50% by 2022.
Learn more about the 2019 Corporate Banking Predictions
For context around these predictions, including the IT impact and guidance on how to integrate each prediction in the digital strategy of the enterprise, view the IDC FutureScape: Worldwide Corporate Banking 2019 Predictions web conference on-demand.