Unlike retail bank customers who rely on a single firm to handle most financial needs, corporate clients maintain relationships with several banks. The result is intense competition as commercial firms vie for wallet share. As the expectations of commercial banking customers grow, technology proliferates, and agile newcomers (FinTechs and other challenger banks) threaten to grab the most profitable aspects of commercial banking, it is a critical time for banks to invest in digital transformation and to fundamentally improve the way they serve corporate clients. The ability to retain and grow business and increase profitability is on the line. Many commercial banks have begun to integrate their systems with that of their clients to extract deep customer insights and leverage AI and machine learning capabilities to streamline processes. Inefficiencies within important value chain areas such as payments and trade finance have been prioritized for transformation, and emerging technologies such as Distributed Ledger Technology or Internet of Things are being leveraged. The open banking API-led economy, collaboration between banks and FinTechs, and data aggregation are all fostering improvements in services. However third-party data sharing and increased digitalization have also put a focus on data security and data-driven regulatory compliance. To remain competitive commercial banks must stay alert to industry developments. This report aims to unpack and analyze 2019’s leading trends for commercial banks.

1. 1© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Top-10 Trends in
Commercial Banking: 2019
Capgemini, December 2018

2. 2© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Top-10 Trends in Commercial Banking: 2019
Digital Experiences and the
Transformation of Commercial Banking
Collaborating with corporates to become
more interlinked with their value chain
Artificial Intelligence in Corporate
Banking
Cyber Security
Transforming Trade Finance
Real-Time Corporate Payments
Processing
Driving better margins with enhanced
focus on non-lending services
Bank-FinTech Collaboration
API - Led Open Banking Economy
Marketplace Lending
1
2
3
10
4
5
6
7
8
9

3. 3© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Commercial Banking Digital Transformation to
Revitalize Customer Experience
Source: Capgemini Financial Services Analysis, 2018
Automated Processes
Product Innovation
New Revenue Streams
Cost Savings
Increased Customer
Experience
Digital Transformation Benefits

4. 4© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Source: Capgemini Financial Services Analysis, 2018; Capgemini’s World Retail Banking Report 2018
Benefits
Enhanced Efficiency and Cost Savings
More Personalized and Customized Offerings
Drive Towards Innovation and Platformification Increased scope of cross-selling and value added services
Real-time View of Financials
Lesser Scope of Errors
Banks to Become More Interlinked with Clients’
Value Chain
Source: Capgemini Financial Services Analysis 2018

5. 5© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Use Cases
AI Use on the Rise at Commercial Banks
Source: Capgemini Financial Services Analysis 2018; Squirro, "The sky is the limit for artificial intelligence in financial services," January 8, 2018
Banking executives say that it would be
highly impactful if an AI engine could spot
relevant events that led to engaging with
a client and closing a deal
87%
AML/Fraud Detection Personalized Offerings
Customer Engagement
(Chatbots / Virtual
Assistants)
Streamline Processing
Increase Operational
Efficiency - RPA

6. 6© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Source: Capgemini Financial Services Analysis, 2018; Capgemini’s World Retail Banking Report 2018
Leveraging Emerging Technologies, Banks are
Transforming Trade Finance Operations
• Minimize the efforts to track
goods and documents
• Enables event-based triggers
such as releasing payment
• Intelligent character recognition
helps in digitizing paper-based
processes
• Reduction in manual efforts with
better completeness checks
• Reduces need of multiple records
and cross-checking
• Enhances efficiency
• Enhances transparency
• Reduction in operational costs
• Leverage it to personalize
solutions
• Intelligent automation
• Ensure compliance by identifying
suspicious activities
Distributed Ledger Technology Internet of Things
Artificial Intelligence Text Recognition
Source: Capgemini Financial Services Analysis 2018

7. 7© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Banks are Streamlining Corporate Payment Services
Bank Initiatives
42%
US corporate finance and
treasury respondents
view real time payments
having a potential for
positive change
34%
US corporate finance and
treasury respondents
view access as an
important feature of real-
time payments
30%
US corporate finance and
treasury respondents
view real-time
messaging as an
important feature of real-
time payments
Digitally transforming payments services by upgrading their
underlying payments infrastructure
Through virtual accounts, banks are automating collections
and reconciliation
Partnering with FinTech firms to offer more streamlined
corporate payment services
Improving cross border payments for corporates
Source: Capgemini Financial Services Analysis 2018; Finextra, “Real-Time payments are at the heart of the new global payments landscape: 10 Trends in 2018,” Barry Kislingbury, February 16, 2018,
https://www.finextra.com/blogposting/15035/real-time-payments-are-at-the-heart-of-the-new-global-payments-landscape-10-trends-in-2018

8. 8© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Source: Capgemini Financial Services Analysis, 2018; Capgemini’s World Retail Banking Report 2018Source: Capgemini Financial Services Analysis 2018
Irrespective of interest-rate changes,
fee-based income provides less volatile
source of revenues
With niche, non-lending offerings, FinTechs are targeting
commercial banks margins
Access to data and technology is enabling banks to
provide custom offerings and advisory
Implications
Banks Aim to Improve Margins through Non-Lending,
Fee-Based Activities
Drivers
Banks will leverage technology to develop
new solutions that derive tangible benefits
for clients
Banks of all sizes will aim to provide differentiated
services to profitable clients
Revenue mix of banks may undergo a change

9. 9© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
FinTech Collaboration Gains Momentum
Source: Capgemini Financial Services Analysis, 2018
Complementary Strengths of Banks and FinTechs
Commercial Banks
Vast Customer Base
Credit Underwriting Capabilities
Risk Management
Existing Client Relationships
FinTechs
Higher Risk Propensity
Less Regulatory Oversight
Leaner Operations
Customer Analytics (Through Alternate Data)

10. 10© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Source: Capgemini Financial Services Analysis 2018
API-Led Open Banking Economy Driving Commercial
Banks' Future Growth
Partnering with FinTechs to Drive Innovation
Push from Government and Regulators
Need for Agile Time-to-Market
Provide Improved Products and Services
Increased Acceptance of Cloud Services
Open API Drivers Approaches for Banks
APIs for Banking Innovation Using Developer
Portals
APIs for Banking as a Platform Leveraging the
Banking License
APIs for Client Connectivity – Real-Time
Straight Through Processing
APIs for Integration

11. 11© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Marketplace Models Impact Traditional Lending
15.7%
Expected CAGR for global
crowdlending segment from
2018 to 2022
~ US$
15k
Average funding per
campaign in crowdlending
(business) segment
Crowdlending (Business)
US$ 8.0
Billion
Investment in the
marketplace lending sector
in 2017
US$ 4.8
Billion
Investment in the
marketplace lending sector
in H1 2018
Investments in Marketplace
Lending
Source: Capgemini Financial Services Analysis, 2018; FinTech Global, "Global Marketplace Lending investment on track to surpass funding levels from last year," September 19, 2018, http://fintech.global/global-marketplace-
lending-investment-on-track-to-surpass-funding-levels-from-last-year; Statista, https://www.statista.com/outlook/334/100/crowdlending--business-/worldwide, Accessed September 26, 2018

12. 12© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
Banks Heighten Cyber Security Investments
87%
FS firm executives have
become more concerned
about cyber-risks, when
compared with 2017
85%
FS Firms has spent more on
tackling cyber risks, when
compared with 2017
45%
Business leaders said that
they will not increase their
digital banking use because
of security reasons
RisingCybercrimeFears
78%
Firms have been targets of
payments fraud in 2017
Source: Capgemini Financial Services Analysis, 2017; Finextra, “FS firms ramp up cybersecurity investment,” May 7, 2018, https://www.finextra.com/newsarticle/32063/fs-firms-ramp-up-cybersecurity-investment; Payments
Journal, “Corporate Banking Customers List Cybersecurity as the Reason They Are Sticking with Checks,” Steve Murphy, July 23, 2018, http://paymentsjournal.com/corporate-banking-customers-list-cybersecurity-as-
the-reason-they-are-sticking-with-checks/; JPMC website, “2018 AFP Payments Fraud and Control Survey Report,” https://commercial.jpmorganchase.com/pages/commercial-banking/services/2018-AFP-Survey

13. 13© Capgemini 2018. All rights reserved |
Commercial Banking Trends 2019 | November 2018 © 2018 Capgemini. All rights reserved.
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