It’s no secret that the COVID-19 crisis has accelerated digitisation for organisations around the world. “The common theme is that digital adoption has accelerated by many years, and is becoming a conversation at the C-suite level,” explains Sara Castelhano, EMEA Head of Payments and Digital Solutions at J.P. Morgan.
However, the destination for digital journeys can vary considerably from company to company. Some organisations are focusing on automating traditional processes, such as liquidity management, payments and working capital. Others are implementing changes to their business models, such as a shift to ecommerce channels. And of course, different companies are at different stages of transformation along this path.
When supporting clients on their journeys, Castelhano says it is important to pin down what each company needs to build by itself, and what it can access from the bank. “Our goal is really to start with a client problem, and bring insights and an agile mindset to solve that,” she says. “That’s something that has accelerated in the last couple of months as we’ve seen digital become a top priority.”
For J.P. Morgan, the focus in this environment has been on building solutions that require minimal effort from clients, such as the Data Once™ portal, which simplifies the onboarding process and avoids the need to enter the same information repeatedly. Other developments include a major focus on supporting clients with e-signatures and connectivity APIs, as well as Virtual Assistant, an artificial intelligence self-service tool.
Another notable solution is the bank’s Virtual Branch model, explains Alan Lin, Head of Asia Pacific Core Cash Management. “In many countries in Asia, customers need to submit physical documents when they make cross-border payments – but we’ve made it possible for them to upload image files using our Virtual Branch capabilities, which removes the physical challenge,” he states. The Virtual Branch was first offered in Asia Pacific and has since been rolled out across markets in other regions, such as Russia and Mexico.
Where liquidity is concerned, Lin says the bank offers a variety of techniques which allow the configuration of rules on how liquidity and currencies are automatically consolidated and centralised in real-time, either physically or notionally. The bank’s leading solutions now extend to Virtual Account Management, which offers a unique proposition enabling in-house-banking and on-behalf-of arrangements to be implemented easily.
Meanwhile, the shift to remote working has created additional vulnerabilities where cybersecurity is concerned. As such, a key focus has been on helping clients establish the right procedures to authenticate calls, report suspicious activity and make sure that remote workforces still maintain the necessary controls. J.P. Morgan has also responded to the growing cybersecurity threat by developing tools, adding payments data to a data lake to identify patterns, and leveraging machine learning and artificial intelligence.
Moving digitisation forward
Companies may wish to access digital tools in a variety of ways, depending on where they are on their digital journeys. J.P. Morgan therefore offers a range of options to support different requirements, including an app inside the company’s enterprise resource planning system that treasurers can use to see balance information and track payments via an analytics dashboard. Others prefer a different approach: “There are customers using Microsoft Excel® that require a simple way to access real-time information,” say Lin. “So we have developed an API plug-in that feeds real-time data into Excel.”
With companies increasingly expecting sophisticated technology solutions from their banks, collaborating with fintech companies is another key focus. “J.P. Morgan has developed a thriving network with over 100 different fintechs, including our alliance with Taulia for supply chain finance solutions,” says Lin. “Other examples are our collaborations with Trovata, offering multi-banking treasury management system, and Global PayEx, providing EIPP and AI/ML receivables reconciliation solutions, to our clients across countries.”
In addition, Lin says the bank is working with specialist providers to build local solutions – such as multi-bank collection and reconciliation solutions supporting local language for Korean clients, and multi-channels collection and reconciliation solution for Indonesia clients. Other notable initiatives include the commercialisation of Project Ubin, a multi-year, multi-phase programme led by the Monetary Authority of Singapore (MAS). The programme aims to solve challenges around cross-currency payments clearing and settlement using blockchain technology, in partnership with DBS and Temasek. This effort is being led by Onyx by J.P. Morgan, which is a newly set-up business unit within the bank’s Wholesale Payments division.
Relationship is key
Finally, embracing digitisation may be a common goal for many organisations in today’s climate – but with companies at different stages of their digital journeys, strong banking relationships have never been more critical.
“You need to make sure your banking partner really understands the local landscape and gives you proactive insights, particularly when markets are complex,” says Castelhano. She notes that for example, it is more challenging for new entrants when they start operating in countries where there are specific documentary requirements or regulations around offshoring cash, like exchange control requirements in South Africa. Consequently, “understanding the local landscape is pivotal.”
For banks, this means paying more attention than ever to what clients are really looking for. As Lin concludes, “When it comes to designing and delivering the digital journey, the most important thing is to have a deep understanding of how the customer operates, how they leverage digital tools, and how we can provide a total solution for their new business models. That’s where we are heading.”