In today’s rapidly changing financial landscape, where every moment counts, real-time data has emerged as the catalyst for unprecedented transformation. It’s not just reshaping the lending experience; it’s revolutionising how we engage and serve the commercial market. From your local coffee shop owner to the global corporate, data gleans invaluable insights on their business operations and the people they transact with.

We can start to tailor how these businesses engage with financial services and, through the power of AI, make the experience special and seamless. Financial data is already playing a pivotal role in Large Language Models (LLMs) and ushering in exciting new applications for the financial sector.

Welcome to the electrifying age of AI in Commercial Banking.

The Traditional Lending Landscape

Conventional lending processes were (and in some cases still are!) time-consuming and paper intensive. Business borrowers would wade through mountains of paperwork, wait anxiously for weeks or months for a decision, and endure exhausting cycles of questions before funds were finally disbursed. The underwriting process primarily relied on historical financial statements, which may not have accurately represented a business’s current financial health, assets, or liabilities position.

Real-Time Accounting Data: A Paradigm Shift

Enter real-time accounting data, a monumental force driving change in the world of lending and beyond. Here’s how it’s causing ripples that are transforming lending, the role of relationship managers, and the overall service proposition of banks:

   1. Swift and Pinpoint Decision-Making

Real-time data injects unparalleled speed into the decision-making process. Lenders can access up-to-the-minute financial information, enabling them to rapidly evaluate an applicant’s creditworthiness. Great news for businesses in need of funds at critical moments.

   2. Accuracy and Enhanced Risk Assessment

Historical financial statements have their place, but they may not accurately depict a business’s current financial status. Real-time data provides lenders with an immediate and precise view of a business’s cash flow, income, and expenses. This mitigates the risk of misjudging a borrower’s financial health, while also getting to the heart of the business, offering a deeper understanding of their behavior and financial trends.

   3. Personalised Lending Solutions

Lenders can now assess businesses of all complexities for finance and present solutions instantly based on business need, rather than what’s convenient. With real-time data, lenders can customise terms to fit the unique needs and circumstances of the borrower. This level of personalisation benefits both the borrower and the lender by aligning with the borrower’s ability to repay, and delivering the right outcome for the business. This not only reduces the risk of default but also delivers an experience that borrowers feel understood and trusted as business partners.

   4. Technology partners and Seamless Integration

Real-time accounting data is effortlessly being integrated into lending platforms, thanks to the emergence of advanced fintech solutions like Validis. By plugging solutions like Validis into the journey, platforms streamline the data sharing between borrowers and lenders, making the entire process smoother and more efficient. The future for fintech is about bringing the power of capabilities together. No one wants to deal with 5 different vendors, so it’s our duty to connect the ecosystem and deliver an end-to-end solution to our mutual customers that can be deployed quickly.

Transforming the Role of Relationship Managers (RMs)

In all my years in Commercial Banking, the relationship manager (RM) has been a focal point and there have been multiple waves of technology that have enabled progress.

I still believe in relationship banking and the need for businesses to have personal connections with their bank. For me, technology is there to complement the RM and the advent of real-time data is redefining their role in banks. They are no longer confined to merely facilitating transactions; they have evolved into strategic partners. Relationship managers can leverage real-time data to provide valuable insights to their clients, helping them make informed financial decisions. They become advisors, equipped with data-driven recommendations and strategies to navigate the complexities of the business world.

Powering AI Advancements

Real-time accounting data is a treasure trove of information that powers AI advancements.

I had the pleasure of attending SIBOS in Toronto a few weeks ago and AI was one of the major buzz terms on the floor. It was enlightening to hear from experts such as KPMG and one of our tech partners Trade Ledger, who launched their Generative AI product alongside Microsoft. Ingesting and analysing data in real time, is enabling an experience that I didn’t think I would see in Commercial Banking but it’s here! Rapid detection of fraud trends, prediction of financial outcomes, and personalised financial advice instantly.

Conclusion

In conclusion, real-time accounting data is revolutionising lending, the role of relationship managers, the entire service proposition of banks, and the field of AI. The future of commercial banking is here, and it’s real-time and personalised, underpinned by the power of AI to offer data-driven insights and recommendations. It’s an era where businesses and individuals can access financial resources with unprecedented speed, accuracy, and personalisation, all while enjoying the convenience of embedded financial services within their everyday digital experiences.

The technology is available, fintechs are bringing their solutions together, it’s not complex nor expensive to implement and a number of banks are making great progress. It’s an extraordinary time to be working in Commercial & Corporate Banking.