Until recently, commercial banking appeared relatively less prone to disruption when compared with retail banking. Things are beginning to change, however, thanks to increasing expectations from corporate customers and the proliferation of next-gen technology. Ongoing industry regulations are encouraging bank innovation and opening doors for new market entrants such as online marketplace lenders. Banks are overhauling their back-end processes through digitization and are leveraging data analytics and automation to streamline operations. Application Programming Interfaces (APIs) are being used to connect with third parties such as FinTechs to collaborate and resolve long-standing customer pain points, including slow payments and settlement cycles as well as complex and paper-based trade finance processes. Commercial banking is expected quickly evolve faster in the coming months and years. This report shares trends likely to impact commercial banking ecosystem dynamics in 2018.

1. Commercial Banking Trends 2018
Capgemini, November 2017

2. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 2
Commercial Banking Trends 2018
 Banks Make Significant Investment in
Back-Office Digitization01
 Tech-Powered Marketplaces Connect
Borrowers and Lenders, Boost Lending Activity 02
 Banks Launch ‘Adoption-Ready’ Blockchain-
Based Solutions03  Banks Leverage Automation to Streamline
Operations 04
 Banks Provide Transparent, Convenient
Corporate Payments Services in Real Time05
 Banks Use Predictive Analytics for Credit
Scoring Institutions and Risk Management 06
 Banks Use APIs to Partner with FinTechs,
Meet Unique Needs of Corporate Customers07
 Banks Develop Agile and Open Systems to Enable
Non-Standardized Third-Party Integrations 08
 New Banking Industry Regulations Spur
Competition, Innovation09  Banks Migrate Data, Processes, and
Infrastructures to Hybrid Clouds 10

3. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 3
Banks Make Significant Investment in Back-Office
Digitization
Source: Capgemini Financial Services Analysis, 2017
Trade Finance
Improved Customer Experience
Cash and Liquidity Management
Integration of Digital Channels
International Trade
Quick Launch of Products and Services
Commercial Lending
Cost Savings
Key Commercial Banking Areas Being Digitized Benefits
Commercial Payments
Compliance and Reporting

4. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 4
Tech-Powered Marketplaces Connect Borrowers and
Lenders, Boost Lending Activity
Source: Capgemini Financial Services Analysis, 2017
Faster and Flexible Credit Access
Emergence of Advanced Technology
Advanced Use of Data Analytics Capability
Lower Cost and Higher Margins Associated with Online
Platforms
Drivers Implications For Banks
Increased Competition
Banks will Partner or Collaborate with Marketplace
Lenders
Opportunity to Invest for Higher Returns

5. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 5
Banks Launch ‘Adoption-Ready’ Blockchain-Based
Solutions
Source: Capgemini Financial Services Analysis, 2017
Key Features
Multiple Consortiums
Increased Investments
Enablers
New Platforms
Increased Adoption
Smart Contracts
Real Time Update and
Payments
Elimination of Intermediaries
Automatic Settlements
Transparent Processes
Reduced Risk of Default/Fraud

6. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 6
Banks Leverage Automation to Streamline Operations
Source: Capgemini Financial Services Analysis, 2017; “Robotic process automation (RPA) - The next revolution of Corporate Functions,” Capgemini Consulting, 2016
1:4
1 Robot replaces ~ 4
Employees
50-
90%
Savings on cost, with
the help of robots
when compared to
employees
3-6 Months, expected ROI
Faster Processes
Enhanced Customer Experience
Allows Employees to Focus on Other
Value Added Tasks
Reduction in Operational Costs
Magnified Efficiency
Seamless Interoperability
Benefits

7. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 7
Banks Provide Transparent, Convenient Corporate
Payments Services in Real Time
Source: Capgemini Financial Services Analysis, 2017
Drivers
Real-Time Payments
Flexibility Using Multiple Providers
Lower Costs Better Experience Across Channels
Security and Transparency
Ease of Return Processing

8. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 8
Banks Use Predictive Analytics for Credit Scoring
Institutions and Risk Management
Source: Capgemini Financial Services Analysis, 2017; "Big Data and Business Analytics Revenues Forecast to Reach $150.8 Billion This Year, Led by Banking and Manufacturing Investments, According to IDC",
IDC, March 14, 2017
11.9%
Expected CAGR of Worldwide
Big Data Analytics Spending
across industries from 2016-
2020E
13.3%
Expected CAGR of Worldwide
Big Data Analytics Spending in
Banking Industry from 2016-
2020E
Credit and Counterparty Risk Management
Fraud Detection, Prevention, and Mitigation
Regulatory Compliance
Applications of Risk Analytics in Banking

9. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 9
Banks Use APIs to Partner with FinTechs, Meet
Unique Needs of Corporate Customers
Source: Capgemini Financial Services Analysis, 2017; Celent, Inc.: “Open Banking APIs: Driving Developer Adoption,” Patricia Hines, Aug 29, 2017
Amplify Banks Reach
Increase Revenue
Stimulate Innovation
>275
New payment and
banking APIs published
by banks and FinTechs
from 2015 (Jan) to
2017 (Aug)
Drivers
Regulations
Faster Time to Market

10. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 10
Banks Develop Agile and Open Systems to Enable Non-
Standardized Third-Party Integrations
Source: Capgemini Financial Services Analysis, 2017
Drivers
Need for Greater Efficiency
Flexibility to Adapt to Industry Changes
Increased Adoption of Cloud
Increased Openness and Collaboration in the
Industry
Adoption of APIs
Focus Areas
Supporting Infrastructure
Executive Leadership Buy - In
Collaboration and Partnerships
Realigned IT Processes
Project Management Role and Responsibilities
People and Culture

11. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 11
New Banking Industry Regulations Spur Competition,
Innovation
Source: Capgemini Financial Services Analysis, 2017
Highly Concentrated Banking Industry
Regulators Push for a Level Playing Field
Need for Improvement in Quality, Variety, and Access of
Products and Services
Drivers Implications
FinTechs, Challenger Banks, and Neo Banks are Thriving
Customers Gain Improved Products and Services
Greater Competition
Banks Investing in Innovation
Banks Collaborating with FinTechs

12. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved. 12
Banks Migrate Data, Processes, and Infrastructure to
Hybrid Clouds
Source: Capgemini Financial Services Analysis, 2017
Cost Efficient
Seamlessly Scalable
Business Optimized
Hybrid Cloud Benefits
Reliable
Private Cloud Benefits Public Cloud Benefits
Stability Flexible
Secure Low cost
Adaptable Pay As You Go

13. Commercial Banking Trends 2018 | November 2017 © 2017 Capgemini. All rights reserved.
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