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Transaction banking revolution: putting clients in the driver's seat

20 Feb, 2018 03:12 pm

In the face of a rapidly changing landscape, BNP Paribas has completely rewritten the rules on innovation and client-centred solutions. Jacques Levet, Head of Transaction Banking, EMEA, at BNP Paribas CIB, discusses how the bank is "co-designing" new products with clients in order to understand their evolving business models, address their pain points and help them to achieve their ambitions.


How is BNP Paribas addressing the major technological and market changes that are occurring in the world of business and trade?

The financial industry is at a turning point, where everything is in a state of change. The digital revolution, impacting both banks and their clients, and the need to industrialize banking processes while providing ever-more personalized services, are leading us to reinvent the way we do business. The exponential development of new technologies that have huge disruptive potential – be it blockchain, artificial intelligence, the Internet of Things, etc. – is both a driver of this change as well as a fantastic opportunity to differentiate ourselves. But, as it is very difficult to anticipate exactly how these new developments will transform our clients' organisations, their business models and overall industries, we decided that, regardless of the new services we wanted to launch, and in order to ensure that we address the true needs of our clients, we must involve them throughout the development process.
We have embarked on a huge transformation exercise in transaction banking, and a large part of that is done through "Co-Design". We "co-design" tomorrow's products and services with our clients, engaging them throughout the design and development process of the overall client journey. 
"We "co-design" tomorrow's products and services with our clients, engaging them throughout the design and development process of the overall client journey."

Why was a radical rethinking of product development necessary?

Understanding how our clients' business models are evolving, and how that will impact their banking needs in terms of trade finance, cash management, foreign exchange, etc., is critical in the face of this massive market disruption. And no one is better positioned than our clients to understand how the macro picture will affect their business, so it is critical to involve them to ensure we build future-proof solutions.
Our clients are also asking us to spend time in their treasury organizations to understand how precisely they operate, to engage them in discussions and testing throughout the development cycle. We always start by identifying the pain points – in their treasury operations, or in the way they interact with us – devise how to eliminate them, and then package it all around a true client journey.
We finally thrive on developing personalized solutions. There is indeed an increasing demand for services that are not fully off-the-shelf, but rather answer a client's unique and specific concerns, and enable its own ambitions. That being said, these bespoke solutions have to be cost-effective. Keeping in mind our respective goals and constraints, we thus build customizable solutions that can be easily tailored for individual client needs while relying as much as possible on fully industrialized back-ends.
Throughout this process, "co-design" is absolutely key. It allows for an ongoing feedback loop where we can test and learn with clients as we go through the development phase. 
"No one is better positioned than our clients to understand how the macro picture will affect their business, so it is critical to involve them to ensure we build future-proof solutions."

How are external partnerships critical to this process?

As true banking partners to our clients, our responsibility is to identify the services and products that they need – wherever they are coming from – package them together and add value by designing an overall seamless client experience. Some of those products and services will be ours, others will come from fintechs or even potentially from more traditional banking competitors.
To be successful in that aggregator role, we obviously need to develop external partnerships, notably with fintechs that are creative, agile and can help us deliver value to our clients. Depending on how strategic the solution is, we can develop simple supplier-client relationships, strong partnerships or even make equity investments — whichever makes the most sense and with a view to deliver value for our clients, for our partners, and for ourselves.
  
This article was published in Global Finance Magazine in September 2017. 
Head of Transaction Banking for Europe, Middle East & Africa
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