Finastra on partnerships and the evolution of the company-customer experience

The pandemic has changed us, dramatically altering consumer expectations.

In trade finance, change has come in the form of demands for digitization.

To catch up on the latest in the digitalization of trade finance, Trade Finance Global (TFG) spoke with Michael Vrontamitis, Senior Industry Manager for Finastra’s Lending Business Unit.

Customers demand better customer service

When it comes to financing international trade, bank customers are no longer content with the old status quo.

Commerce is a historically paper-based industry, with less than 2% of transactions in electronic form.

Advances in technology, coupled with the telling disruption of the pandemic, have made customers want more of their services to be available digitally.

To capitalize on this growing demand, banks dealing with importers and exporters are increasingly looking to provide these types of digital services that customers increasingly expect.

Unfortunately for banks, going digital isn’t always a quick and easy solution.

Vrontamitis said, “It all starts with the basics: you can’t just layer a good digital experience on a bad architecture.

“Many banks are now investing in their core architecture and systems to ensure they operate more efficiently, so they can then build digital experiences on top of it.”

Partnerships

With so many fintech providers on the market today, it can be difficult for anyone to choose just one.

Fortunately, this decision may not be one that banks and customers need to make.

Vrontamitis said, “What we’ve seen over the past few years is about partnerships and developing an ecosystem that we can work on together.

“We believe finance is open, and by being open, we need to connect people to their global ecosystem.”

For Finastra, this means working with partners at multiple levels to implement an assortment of technology solutions and capabilities.

Vrontamitis added, “No single technology provider can deliver every solution to every customer, which makes it essential to be able to provide this kind of connectivity and seamless integration with a number of partners.”

This degree of interconnectivity will be further enhanced by increased standardization across the industry.

large data center

Standardization

In the international world of trade finance, however, standardization is not an easy problem to overcome.

Over the years, many initiatives and working groups have been created to standardize the space, the most recent of which is the Digital Standardization Initiative (DSI) of the International Chamber of Commerce (ICC), founded by the Universal Trade Network (UTN).

The work of these initiatives revolves primarily around raising awareness and understanding, identifying white spaces where standards are required, and then collaborating to implement those standards.

For many, this means that setting standards takes time; and there hasn’t been much traction with adoption in banking, corporate or Application programming interface (APIs).

Vrontamitis said, “In the meantime, we expect to have to help our customers connect their platforms in the absence of these standards, as we need to enable them to increase their revenue.”

digitization of commerce

Look forward

While banks certainly have an increased workload with the added challenges of sanctions and compliance requirements, they must remain focused on a digital transition and its parallel elements if they wish to remain relevant.

Vrontamitis said, “I expect we will see continued growth in trade finance activity over the next six to twelve months.

“We are focused on how we bring these partnerships to market and allow our customers to connect to the different options that exist in a more seamless way.”

An important part of this involves remaining open to exploring successful partnerships in space and sacrificing some individual autonomy for the collective benefit of a common set of standards.

If they do, banks can tap into this growing market with the enhanced experience customers are looking for.

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