Tuesday, November 19, 2019 Stamford, CT USA — For a business that is generally considered stable and rather slow to evolve, large corporate banking is changing fast.
The globalization of U.S. corporate business coupled with a disruptive trade war, the proliferation of digital technology, the rise of fintech providers, and the strategic retreat of certain global banks are shaking up the corporate banking industry and putting growing amounts of corporate clients and business up for grabs.
“Together, these factors have created an environment in which nearly half of large U.S. companies anticipate moving business from one bank to another in the next 12 months,” says Greenwich Associates Managing Director John Colon. “For the 2019 Greenwich Share and Quality Leaders in U.S. Large Corporate Banking, this unusually large amount of “money in motion” represents an opportunity to win new clients and capture market share.”
“Churn” in Corporate Bank Lists
Despite the trade war between the United States and China and the ongoing Brexit saga, U.S. companies actually increased their exposure to overseas markets last year—at least in terms of their banking needs. For example, the share of large U.S. companies using at least one bank for payments/receivables and/or cash management in Western Europe increased to 65% in 2019 from just 58% in 2018. The uptick was equally impressive in Latin America, Central and Eastern Europe and the Middle East and Africa.
The only region not to record a significant increase last year was Asia-Pacific, where the share of U.S. companies using a bank for inbound or outbound services hovered around 50% from year to year.
As their expanding global businesses and geopolitical turmoil force them to find banking coverage in new countries, U.S. companies are looking beyond the global banks and considering local providers. As a result, the average number of banks used by large U.S. companies for international cash management increased to 4.5 in 2019 from 4.0 in 2018.
Companies Feeling Positive Impact from Analytics, AI and Other Bank Technology
In addition to turnover in their lists of banks, companies are starting to feel the impact of technology investments made by their banks—and by new fintech providers.
One-third of the large U.S. companies are benefiting from new insights and alerts from data analytics and artificial intelligence features on their banks’ digital platforms. “Our data shows that 72% of corporates would allocate more business to providers delivering new insights based on predictive analytics and AI,” says Greenwich Associates Managing Director Don Raftery.