A BAG OF TOKENS FOR YOUR CORPORATE BANKING (Irina Latushkina)

Talking about digital banking, we all mostly imagine innovations for retail clients: digital teams work hard to provide digital onboarding without a visit to a branch, fully digital experience in mobile or internet, omni-channel approach and even security…
It all has become buzzwords and hot topics at all the banking conferences. But what about corporate banking?

I remember early days of our company. That time we tried to do our first steps in a very new and exciting market to us – in Indonesia. There were busy days and we had a kind of business “speed dating” with many local potential partners. One of the gentlemen
we met that times was Mr.Wira, a multiple entrepreneur moved to the tech space.

We came a little bit in advance to our meeting with him, so Mr.Wira was busy  with one of his business at the moment. He said: “I beg my pardons but I need to make an urgent payment”. His laptop was open – we all know that internet bank is still the most
powerful channel for corporate banking. Then Mr.Wira took a bag. When he opened the bag, he started his “hunting” for a proper MAC-token relevant to the company he aimed to make a payment. He looked at us smiling and confused: “Yes, this the corporate banking
we have here, looks like you can change it guys”.

You may smile thinking that it is all about Indonesia but actually it is a common story – we had the same smiling confused faces when we were given paper check-books after account opening in Singapore, in this advanced tech mecca of APAC.

Why are corporates clients “discriminated”?

I believe that there can be several reasons for it. The first one is surely financial: in competition with fintechs to grab more retail clients the value of SMEs accounts take a back seat. At the same time big enterprises are mostly well-regulated and more
traditional in their mindset. They feel comfortable to follow classical procedures and even use hard-tokens to access digital financial services.

Another interesting point here is the banks’ structure: most resources including tech teams and financial investments are granted to digital retail, so many of advanced technologies available to them are not available to corporate banking teams. Solution
providers reflect this game rule and also create more pretty fancy solutions for retails clients — for example, you can easily find a number of eKYC solutions and barely find eKYB, although enterprise clients would easily pay extras for passing the onboarding
process without a visit to a branch.

Many banks are creating a kind of super-apps for retails but you can barely find a user-friendly option for corporates — with easy access both in corporate and mobile, additional partner services such as web-page design on Wix, co-working facilities or recruiting
service promo or even business registration. Considering which bank to choose for our new business branch support, definitely, I would choose the one that offers business branch registration support, access to governmental services and all the rest partner
services that I may potentially need. Why? Because people of my generation, being at the age of 30-40, may hardly remember the last time we visited a branch as retail clients — so, we are already spoilt with fully-digital experience and don’t want to change
it for anything else.

Something special about corporate banking

Talking about corporate banking, we should think about security. In this perspective a “bag of tokens” is not that bad actually — especially, when you realize that some countries in APAC still use simple static passwords or SMS to protect users’ accounts
or money transfer operations for retail clients. Definitely, such a reckless approach is not applicable to private or corporate banking because here we deal with bigger amounts and higher cyber-risk accordingly. That’s why proper authentication tools are the
must.

But the funny thing about security for corporate banking clients is that any OTP-based tokens can hardly guarantee security. You may easily find proofs of this with OTP-bypassing by OP WOCAO hacking group or transaction details switch for example. Yes, you
got it right: in many cases your existing authentication solution will fail in some types of hacking attacks.

The good thing is that there are about 300 authentication developers around the world, so you have a chance to choose, compare and take an option you like. What is important here is to choose the solution that is able to perform no-OTP authentication with
strong integrity control checks. Nothing special and very special at the same time.

An easy way to make your corporate bank more user-friendly

If you still offer your clients hardware tokens — you may start with this point asap. Simply take appropriate solution from one of those 300 global solutions providers. This is not only cost-reduction for a bank itself — you don’t need to think much about
storage, delivery or renewals of the outdated tokens for your clients — this is about user-experience first of all.

Don’t stress your clients with keeping such a rare object as token, specially, when they are on travel.  Don’t make them use one channel only. Don’t stress your entrepreneurs with the need to install any special software — if I’m opening a flower boutique,
I may have a very poor idea about tech, I want to focus on flowers in my shop and best ways to deliver them, pay taxes and etc. Use no-OTP authenticators to minimize security risks and reduce stress of your clients.

You may think that there is nothing in common with revolutionary technology you want to offer your clients but it depends on the angle you look at it. If you have a proper digital authentication solution, you may minimize the number of physical contacts
with your clients, you may add more significant digital services to your clients and interact in a secure way. It will help you to support your entrepreneurs of the new generation with company registration, financial services, payroll services, product placement
in marketplace or any other service that requests strong client authentication.

In other words, let Mr.Wira make his business without a bag of tokens otherwise the next competition between banks and global fintechs will be on the field of corporate finance.