The key to commercial banking success: serving a segment of one

In today’s increasingly complex and competitive business environment, selecting the right commercial banking partner is more crucial than ever

Bank of the West is committed to using innovation to make the user experience simple, while adopting a consultative approach to help customers grow their businesses 

Businesses today are operating in a global marketplace defined by an expanding set of challenges, complexities and uncertainties. PwC’s 22nd Annual Global CEO Survey, which polled 1,378 CEOs in 91 territories, revealed that CEOs are “extremely concerned” about the ease of doing business in the markets in which they operate. This was due to a variety of factors, including increased regulation, geopolitical uncertainty and trade issues.

At the same time, technology continues to be at the forefront of many executives’ minds. While it offers tremendous opportunities to lead and disrupt, it also poses significant risks as a result of the looming threat of cyberattacks, as well as increasing sensitivity and regulation around data privacy.

We are currently living in the Fourth Industrial Revolution – a key chapter in human development that the World Economic Forum refers to as an age where new technologies are developing “at a speed and scale unparalleled in history”. To maintain a competitive edge amid this unprecedented flux, both companies and their operations are changing fast. To that end, KPMG’s 2018 Global CEO Outlook, which surveyed 1,300 CEOs across 11 of the world’s largest economies, reported that 71 percent of CEOs say they are prepared to lead their organisation through a radical transformation of its operating model.

Customers do not want to be painted with a single brush and handed a generic set of fixed, disparate services

A bank’s only customer
Rapidly evolving companies have a new set of expectations for the commercial banking partners they rely on to help them successfully adapt and grow. In today’s environment, the oversimplified, one-size-fits-all approach is no longer sufficient to meet companies’ wide-ranging and intricate needs.

Customers, meanwhile, are looking for banks that have a deep understanding of their business. They do not want to be painted with a single brush and handed a generic set of fixed, disparate services – increasingly, they want to be treated as if they are the bank’s only customer. With this in mind, let’s take a closer look at three critical ways banks should treat their commercial customers.

First, commercial banks should focus on using innovation to make the user experience simple, intuitive and transformative. This includes utilising integrated tools that organise solutions in the way the client requires, thinks about and uses daily. Commercial banks that employ a genuine ‘segment of one’ approach put their customers first in every aspect of the relationship; crucially, they provide solutions tailored to a company’s specific needs.

Second, they should take a consultative approach in order to help customers grow their business by configuring a level of control and delegation that is flexible and aligned with the company’s operations and objectives. Lastly, banks must deliver an integrated experience that spans all services and markets around the globe.

Bank of the West’s treasury management platform does all this by offering both a frictionless experience and customer control. Essentially, it enables individual users to tailor the online and mobile banking platform to their own unique business needs. For example, the platform’s landing page can be customised either for the sole proprietor of a small business or for an accounts payable analyst in a large corporation. Reports, templates and views can also be tailored to maximise efficiency and eliminate manual effort for each user, as though the platform were designed specifically for them.

Similarly, our investments in a payment hub with customisable functionality enable us to tailor services to the unique needs of any specific customer. To cite two examples, we can offer select customers after-hours processing of wire and ACH transfers, and we can restrict transactions to certain IP addresses or certain users.

Our payments hub also helps us understand a specific customer’s payment patterns across different transaction types so we can compare those against aggregated industry and domain data. Using this information, we can offer individualised cash management consultation services and advice.

A global gateway
The individualised solutions a commercial banking partner delivers need to extend across the client’s global footprint. The first step is ensuring that the bank’s services are aligned with the customer’s objectives and organisational structure, which can vary broadly across markets.

Every company has unique needs across its footprint, particularly with regards to financing and supply chains. To help address increasing concerns about the ease of doing business in international markets, commercial banks should be focused on minimising organisational and geographical boundaries that restrict growth.

As a subsidiary of BNP Paribas, Bank of the West connects its customers to commercial banking solutions and expertise in 72 countries. Our One Bank team acts as a strategic partner, understanding our customers’ objectives wherever they operate. In doing so, the team helps them navigate the challenges of local banking markets in Europe, the Middle East, Africa, North America, Latin America and the Asia-Pacific region. Essentially, we match banking solutions to a customer’s organisation. We also help multinational organisations restructure their operations in order to maximise efficiencies, such as by setting up a centralised treasury function with all countries reporting to it.

It is also essential that a commercial bank has specialised and local knowledge of specific industries to help customers position themselves competitively in the relevant sector. For example, when a leading real estate development company in Europe – a BNP Paribas customer in its home market – made a decision to enter the US market, our One Bank team swiftly connected that company to Bank of the West so we could provide guidance on what it might expect if it pursued a land acquisition loan in California. This included market knowledge and a general review of local real estate regulations and procedures. Building on that advice, we customised the financing for the company so it could acquire its desired US property in less than 90 days.

As another example, we recently assisted a family-owned boutique winery based in Napa Valley, which was selling its main wine brand to an international food and beverage company. Drawing on our experience advising wine and beverage companies, our strong M&A track record in the industry and our long-standing relationships with potential strategic and financial acquirers around the world, we supplied global industry insights and diligence to the client. We also made a vital introduction to the eventual buyer – an Australian-Japanese company. In situations like this, Bank of the West’s direct access to a global buyer pool can help elevate pricing when we lead a sales process.

Cybersecurity safeguards
Even the most customised commercial banking relationship is ineffective if it’s not underpinned by a holistic approach to cybersecurity and fraud prevention. These safeguard both the commercial bank and the company it serves, and should not be overlooked.

As cybersecurity risks continue to threaten every company’s competitiveness, growth prospects and survival, 49 percent of CEOs say that becoming a victim of a cyberattack is a case of ‘when’, not ‘if’, according to KPMG’s latest Global CEO Outlook. Despite this, the survey revealed that only 51 percent of executives believe they are well prepared for a cyberattack.

To be prepared, commercial banks should use a risk-based, not rules-based, approach to security that serves customers with more flexibility. For example, our clients can configure our treasury management platform to their unique needs and preferences. We also offer a range of authentication options – from hard tokens to biometrics – as a toolbox our customers can select from. To make the system even more robust, we are now working on incorporating FIDO2/WebAuthN into our treasury management platform by year-end. By leveraging cryptography, FIDO2/WebAuthN sets a new standard by enabling simpler and stronger authentication for online users.

In another payment area, V-PAYO (our virtual card payment optimisation solution) applies a unique method to each B2B payment based on an algorithm that optimises cards or automated clearing houses. This gives our customers increased control and provides greater fraud protection, while also increasing efficiency and reducing expenses.

To genuinely put customers first and serve them as a segment of one, commercial banking partners must make continual investments in innovation, serve as a seamless gateway to local solutions and market expertise that matches the client’s global footprint, and deliver cutting-edge cybersecurity safeguards. That bespoke support is vital to help any company thrive in this new Industrial Revolution.