Corporate demands are driving banks to invest in technology solutions

By Puja Sharma

Global Research into Corporate Banking’s Future 2022, surveyed banking respondents across the globe and examined the state of corporate banking following the Covid-19 pandemic. The build versus buy debate formed a significant part of the report, detailing how banks have responded to the growing corporate demand for tech solutions.

Research into corporate banking by digital business and IT services leader NTT DATA has found that banks are investing in technology solutions to cater to growing corporate demands. The corporate banking industry is vastly different from what it was a couple of years ago, with digital ways of working changing client expectations. The report outlined a major dilemma faced by banks in response to the increasing corporate demand for tech solutions. As a result, more banks than ever are looking to digitise their platforms, with 61% preferring to build out their technology stack, rather than buy technology solutions from a third party.

While the majority of banks are electing to build their solutions to meet client demands, only 22% are building their solutions from scratch, whilst 78% are building upon their current cash forecasting solution. For those electing to buy tech solutions, 54% are planning to work with fintech or a third-party provider, whilst 46% are integrating an off-the-shelf solution.

NTT DATA’s report, Global Research into Corporate Banking’s Future 2022, surveyed banking respondents across the globe and examined the state of corporate banking following the COVID-19 pandemic. The build versus buy debate formed a significant part of the report, detailing how banks have responded to the growing corporate demand for tech solutions.

In Europe, the preferred option is to build their technology solutions for advanced cash forecasting, matching global trends, while over a third are looking to fintech providers to support their technology offerings. Conversely, in LATAM, there is more willingness to trust external providers, with almost half (48%) of banks preferring to buy in a cash forecasting solution.

Miguel Mas Palacios, Director of Global Corporate Banking at NTT DATA, said, “There’s a tech stack demand that’s building for banks, and change is being demanded by their clients. The conundrum is whether banks build their tech, or buy it in.

“We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”

Partners and acquisitions are increasingly being used to expand the capabilities of financial institutions. FinTechs and InsurTechs are often seen as potential competitors to traditional financial institutions, but many are partners, according to the survey by EY.

As a result of the pandemic, some FinTech firms are making opportunistic acquisitions. Despite high valuations, some companies have become attractive targets for acquisition.