4 1 INTRODUCTION WHAT IS DIGITALIZATION AND WHAT ARE ITS IMPLICATIONS Digitalization is the ongoing transformation of traditional financial products and services into easy to integrate electronic processes Promising ever greater efficiency stability and transparency it is a process with implications that will be felt across global financial markets For corporates and their banking partners the adoption of new services and technologies will change the ways in which they interact as well as how they work to overcome the challenges of an ever more globalised marketplace Not only do digitalised interfaces promise a more convenient user experience the integration of end to end and automated processes will generate cost savings for corporates able to reduce the need for manual work Indeed digitalization offers the possibility of entirely new mechanisms such as instant payments and content management platforms These developments are forecast to happen at a rapid pace Peter Ayliffe CEO of Visa Europe for instance has predicted that by 2020 more than 50 of transactions will be made using mobile phones To deliver these promises however banks must leverage these trends to create better services for corporates If they are too slow they risk being disintermediated by quick footed market entrants The onus is therefore on banks to innovate with the aim of building better and more efficient services for their corporate clients Creating new efficiencies For corporates themselves the coming wave of digitalization promises to create new efficiencies as well as aid expansion in an increasingly globalised economy helping them meet new demands in areas such as strategic planning risk management trade settlement and FX And they will use new criteria to choose banking services with costs diminishing in importance as ease of use and accessibility become more significant Yet banks must be wary of change for change s sake The mere transference of paper processes into electronic equivalents will not add value unless wider structural and strategic thinking is also employed In many respects banks are well acquainted with digitalization meaning that the changes will be evolutionary rather than revolutionary Indeed according to a speech made by Dr Volker Lange at the EXCHAiNGE Supply Chain Conference in 2013 the quantity of data used in world trade already increases by a factor of 1 000 every ten years But the market for banking services is also on the cusp of greater change making it difficult to predict the shape of the banking services industry in say ten years time To survive and to continue to add value for their corporate clients banks must work to identify their strengths such as convenience trust and expertise and address their weaknesses especially with respect to the delivery of digital services and products

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