As the transaction banking landscape is transformed by the drive to digitalise, banks such as DBS are leading the charge: Harnessing technology to deliver strategic value to clients that are looking to build new income streams and inspire new ways of doing business. 



Inspiring banking transformation through collaboration

Today’s emerging solutions — from mobile payments and collections to highly bespoke digital supply chain solutions — are only the start of the digital transformation within transaction banking. By leveraging a bank’s solution and advisory expertise, treasurers and CFOs are gaining a better grasp of new market developments and opportunities, and using this knowledge to shape the company’s digital strategy.

A fast-changing digital landscape

Businesses around the world — from small start-ups that disrupt conventional markets to large, established leaders in traditional industries — are increasingly investing in digital initiatives to create new income streams and inspire new ways of doing business.

This shift to digital business models is giving rise to a radical shakeup in transaction banking, spearheaded by commercially savvy digital leaders that include both progressive enterprises and financial service providers. Companies want, and expect, their banking partners to be at the forefront of this move to digitalise — and the value to banks and their clients is seen in improved quality of service, strengthened relationships, reduced complexity and enriched decision-making. 

With digitalisation now a key competitive driver, the needs of corporate treasurers and finance managers cannot be satisfied by out-of-the-box banking products that do not reflect their distinct operational and strategic objectives. Instead, co-creation of digital business propositions between financial service providers and their clients have become the new normal mode of engagement.

Driving digital strategies and building ecosystems

Banks such as DBS are taking a leadership role in shaping the next generation of banking, while also forging partnerships with other digital pioneers. This includes working with leaders in a wide variety of industry segments — such as retail, fashion, resources, pharmaceuticals, commodities trading, insurance, automotive, branded consumer goods, telecoms, technology, and healthcare — to deliver a competitive advantage by leveraging technology and insights supported by data.

As an example of this co-creation, DBS worked with the finance team of a leading shipping company recently to develop a new trade finance revenue stream

John Laurens - DBS Head of Global Transaction Banking
John Laurens; Head of Global Transaction Banking | DBS

by financing the goods it carries for its exporting customers, using an innovative digital platform supported by efficient electronic processes. The company quickly recognised that a fresh approach to transaction banking would be required to structure and implement this new proposition. Although the company didn’t have an existing relationship with DBS, it recognised DBS’ leadership in digital banking and made the decision to collaborate on a new digital solution.

“This example demonstrates how digitalisation has transformational potential in the way that companies select partner banks and the solutions they offer. Digital advisory and co-creation journeys have elevated the engagement between DBS’ transaction bankers, relationship managers and our customers well beyond the conventional bank-customer partnership.”

—John Laurens, Head of Global Transaction Services, DBS

Leveraging APIs and ecosystems

Open application programming interfaces (APIs) offer small and medium-sized enterprises (SMEs) an unprecedented opportunity to access banking services directly from their own systems. The ability to blend business and financial flows is instrumental in developing business models that rely on instant fulfillment, creating new sales and distribution paradigms, improving productivity, and leveraging resources effectively — a key requirement for SMEs.

For example, DBS has worked with Tally, an accounting system used extensively by SMEs in India, to develop an API that integrates banking services seamlessly into their core application. This eliminates duplication of input, enables easy tracking of payment statuses, allows mobile approvals, and provides instant transaction advice to suppliers, all within a highly secure environment.

Similarly, DBS has published APIs that have been developed in conjunction with companies, such as cloud-based accounting platform Xero, using collaborative development activities such as hackathons. These collaborations enable software providers to integrate DBS banking services directly into their solutions, offering a range of new opportunities to customers.

The integration challenge is often more complex for large multinational corporations that have multiple enterprise resource planning (ERP) tools, as well as treasury and payment systems. However, advances in real-time, message-based connectivity between banks and large enterprise platforms are emerging as a more flexible and dynamic means of exchanging transactions, data and insights than traditional host-to-host connectivity.

This is already becoming a reality in cutting-edge, high-volume, consumer-facing industries such as insurance. In July 2017, DBS worked with MSIG Insurance, one of Asia’s leading general insurers, to provide an instant electronic payment service for travel insurance claims — replacing expensive cheques and manual processes with efficient, automated approvals, controls, and payment processes, thus reducing the time to settle a claim by four days.

In addition to innovation by banks and technology providers, many of the new opportunities in transformational service and payments innovation are enabled by the increasing number of 24/7 real-time payment infrastructures and associated central addressing systems that are evolving quickly across the world, including FAST in Singapore, UPI in India, and NPP in Australia.

“As the development of new market infrastructure continues to evolve, banks will continue to emphasise their ability to connect to one or more of these infrastructures; however, the important issue for clients is not whether their banks connect, but how these have been embedded within an efficient, secure, end-to-end process.”

—John Laurens, Head of Global Transaction Services, DBS

As the world moves full speed ahead on the drive to digitalise, transaction banking is relatively late through the gate, due to the complexity of market infrastructures and rigid systems that are often siloed and challenging to navigate. However, treasurers and CFOs now want, and expect, more from their transaction banking partners. Banks like DBS are leading the charge to digitalise, and harnessing technology to deliver strategic value to clients that are looking to build new income streams and inspire new ways of doing business.