Corporate Treasury: what is the outlook for Open Banking?
In BtoB and BtoC, Open Banking is growing a little more each year...
However, this major transformation of banking services has not yet revealed its full potential. How far along are we now in terms of BtoB? How is cash management already facilitated by Open Banking? What are the next steps?
For several years, the development of Open Banking - driven in particular in Europe by the DSP2 directive - has enabled banks to offer their clients, both private and professional, a wider range of services thanks to the aggregation of third-party offers. This is what Societe Generale offers its Wholesale clients, who have access to all API services via the SG MARKETS portal, whether these services are provided directly by the bank, by third parties or by partners (mainly fintechs and publishers).
More choices for clients
With this approach combining Open Banking, API and the aggregation of services, we have entered a new era: an era in which the offering aimed at clients is no longer limited to products designed by the bank. The bank has thus shifted from the logic of a service producer to that of a service distributor. In this way, the bank is positioning itself as closely as possible to the needs of its clients.
This revolution, first seen as a major risk of disintermediation of banks by fintechs, quickly came up against reality. Start-ups, while more agile than banks, could not directly reach clients with their products as they lacked the appropriate distribution network and the credibility of a bank.
Banks were able to highlight major assets - distribution networks, client knowledge, security, etc. - to transform this situation into an opportunity and reinvent their client relationships.
From competition to cooperation
By gaining maturity, the ecosystem was able to evolve from competition to cooperation. At Societe Generale, this change is reflected in two key aspects of the logic that now applies to the creation of any new offer: the “Buy first” principle and the “Cloud first” approach. In other words, if a product that meets a client need already exists on the market via a partner, it is not necessary to develop this product and it can, moreover, be easily integrated.
This principle was central to the launch of the Global Treasury by Kyriba offer in 2021. Thanks to the combination of Societe Generale services and tools developed by Kyriba, a leading player in its market, clients now have a comprehensive cash management solution (overview, payment management and fraud management). With a fully integrated and customisable solution, our clients have access to a tool that allows them to view their cash positions in real time, manage liquidity forecasts, automate their payments, and connect with other banks and ERP.
Access to new forecasting and cash management tools
This is the first case of an Open Banking partnership in terms of cash management for companies. There will be more examples. Indeed, while the major CAC40 groups already have control over the management of their cash flows and liquidity, this is not the case for many SMEs and ISEs, which do not have the same means of action and management. However, with the crises of recent years, companies have become aware that they need to provide the most detailed and immediate visibility of their cash flow as possible.
Of course, this need is not new, but the way it is understood has fundamentally changed over the past three years. In this context, Open Banking (with connection to ERPs and bank accounts), combined with artificial intelligence (for data analysis), will make it possible to provide increasingly powerful tools that enable an increasingly accurate forecast of incoming and outgoing cash flows.
What will be the next step? Perhaps it will involve the ability to offer competing services - including those of the bank itself - within marketplaces, in order to better serve our clients and ensure that they will always have access to the best solution according to the context and their needs. Far from destroying value, this openness will make it possible to offer more adapted services and strengthen the relationship of trust between the bank and its clients.