February 24, 2021 | Stamford, CT — The COVID-19 crisis changed the banking industry permanently by ushering in the age of digital corporate banking.
From a corporate finance perspective, the biggest challenges for large companies in Europe and Asia in 2020 related to operations. However, fast response from central banks and governments globally avoided a liquidity crisis and set financial markets and corporate balance sheets back on a sound footing.
“Corporate treasury departments leaned on their banks for help in keeping their businesses running,” says Tobias Miarka, Co-Head of Banking, Research at Coalition Greenwich. “In most cases, this meant transitioning the vast majority of corporate banking and cash management functions to digital platforms almost overnight.”
In both Asia and Europe, companies participating in the annual Greenwich Associates 2020 Large Corporate Banking Study report the most valuable form of assistance their banks provided was increased flexibility for documentation enabled by digital solutions and other digital processes that allowed companies and treasury departments to continue functioning efficiently.
Among the solutions cited by companies as helping them most during the crisis were digital platforms that allowed for the easier circulation of documents, digital solutions to ease KYC burdens, and digital signatures.
In Europe, corporate focus on digital plays to strengths of largest corporate banks
Digital capabilities are playing a bigger role in companies’ selection of providers in core banking functions, as they reshape the competitive dynamics of the corporate banking business in Europe.
For example, after pricing, the top criteria used by large European companies choosing a cash management provider in 2020 were customer service, which is increasingly facilitated through digital channels, ease of doing business, which is largely determined by digital solutions that ease the burden of KYC and other compliance rules, and digital banking capabilities.
Companies’ increased focus on digital banking plays to the strength of the largest banks in Europe, especially the banks named 2021 Greenwich Share and Quality Leaders. The banks making up this year’s list of winners managed to maintain the industry’s highest client quality ratings and preserve or even expand their footprints through last year’s crisis.
In both European Large Corporate Banking and Large Corporate Cash Management, BNP Paribas tops the list of 2021 Greenwich Share Leaders, followed by HSBC. BNP Paribas also claims the title of 2021 Greenwich Quality Leader in both categories, joined by UniCredit in Corporate Banking and J.P. Morgan in Cash Management.
Asia’s top local banks surprise with strength in digital capabilities
There’s no doubt that the shift to digital banking by large companies in Asia could increase the competitive advantage of global banks, which are outspending smaller, regional competitors on IT investments by a massive margin. Despite that imbalance, leading local banks continue to gain ground on global players during the COVID-19 crisis and the sudden transition to work from home.
“Companies unfamiliar with the capabilities of the top local banks in Asia might be surprised at how high their corporate clients rate them for digital products and capabilities,” says Gaurav Arora, Head of APAC & Middle East at Coalition Greenwich. “Asia’s leading local banks continue to demonstrate that their digital platforms are capable of meeting the needs of many large Asian companies, even in the most difficult of conditions.”
Despite the strong performance of Asia’s top local banks, the sheer geographic reach of global banks and large regional competitors helps them dominate the ranks of the Greenwich Share and Quality Leader Awards across the region.
In Corporate Banking, Asian “glocals” HSBC and Standard Chartered Bank top the list of 2021 Greenwich Share Leaders for Total Asia, followed by Citi, DBS, ANZ Bank, and BNP Paribas, with ANZ Bank also taking the title of sole 2021 Greenwich Quality Leader. In Large Corporate Cash Management in Asia, the Greenwich Share Leaders are HSBC, Citi, Standard Chartered Bank, DBS, and BNP Paribas, with J.P. Morgan claiming the 2021 Quality Leader designation.
Full list of 2021 Greenwich Excellence, Share and Quality Leaders: Asian Large Corporate Banking and Cash Management
Full list of 2021 Greenwich Excellence, Share and Quality Leaders: European Large Corporate Banking and Cash Management