The wholesale banking industry is undergoing an evolution alongside the entirety of the global financial industry, as digital technologies play an increasingly prevalent role in business and client expectations continue to develop and grow at a rapid pace.

In 2023 and beyond, wholesale banks must look beyond simple digital transformation and toward digital innovation, particularly in terms of how they can provide greater value to clients through personalized, highly-tailored services.

In this article, we are discussing the top three trends for the wholesale banking industry to keep an eye on in 2023. From the next phase of digital transformation to how to find specialized talent and utilize data and analytics to foster greater success, we cover everything wholesale banks need to know as we move into the final quarter of 2022.

Without further ado, let’s dive into the first trend of 2023 — digital transformation 2.0.

Trend 1: Digital Transformation 2.0

The early days of digital transformation in the banking industry have come and gone — now, digital transformation 2.0 is upon us.

Digital transformation 2.0 — or DT 2.0 for short — is the next wave of technological innovation that will focus much more heavily on leveraging artificial intelligence (AI) and machine learning to enable more accessible services, greater process automation, and more.

For the wholesale banking industry, DT 2.0 will heighten the need for technologies and solutions that embrace open banking and enable more personalized and connected services.

According to Deloitte’s 2023 Banking and Capital Markets Outlook report:

“Despite a loyal client base, commercial banks will likely face fierce competition to win a greater share of corporate clients’ wallets. They are demanding bespoke digital, data-rich solutions, and tailored advice. These will likely require banks to excel at a new client service model.”

Trend 2: Staff Augmentation

Finding talented staff trained in both the nuances of finance and the evolving advancements in technology is an increasingly difficult challenge for the wholesale banking industry, and will likely continue to be a challenge as we enter into 2023.

In Deloitte’s 2022 Banking and Capital Markets Outlook, the task of finding skilled candidates in niche technical areas is discussed as being one of the top hurdles for financial institutions to overcome.

Four out of 10 financial services executives even went as far as to state that their current workforce was “not ready to adapt, reskill, or take on new roles during the pandemic” leading to an often drastic shortage of talent in some of the most pressing digital specialities.

The report outlines the top 6 most difficult staff talents for financial service companies to acquire:

  • Artificial intelligence and machine learning
  • Cybersecurity
  • Data science and data analytics
  • Software development
  • Cloud engineering
  • Risk management and modeling

The solution to these major staffing shortages and inaccessibility to adequate talent is likely to lie in staff augmentation — a type of service offered by FinTechs in which talented specialists are assigned to banking clients for temporary or ongoing contracts.

Staff augmentation comes with many benefits for wholesale banking, including:

  • Decreased Onboarding Needs: A major challenge for banks currently is not just finding the right talent needed to remain competitive in the digital era of banking but also attracting and onboarding that talent. With staff augmentation, the only thing a bank must do is find the right FinTech partner — from there, the necessary talent with the right specializations is provided for them as part of a business contract.
  • No Required Training: With staff augmentation, talented candidates come to a banking client already trained, with deep experience in both finance and technology. As a result, banks can focus on the most pressing business issues without having to expend resources, time, or money on training new staff members.
  • Ongoing, On-Demand Support: Staff augmentation enables banks to utilize talent as needed, rather than committing to long-term employment contracts. In turn, businesses in the wholesale banking industry can achieve greater scalability and flexibility according to current business needs and client demands.
Banking Trends in 2023

Trend 3: Advanced Data & Analytics

In August 2022, McKinsey & Company released a new report and interview on how data and analytics are transforming the wholesale banking industry.

To remain competitive in 2023 and beyond, McKinsey & Company states that wholesale banks need to focus on innovation and improvement in several key areas, including:

  • Optimized client services
  • Tailored insights with a focus on environmental, social, and governance (ESG) factors
  • Enhanced data and intelligence that allows for unhindered, highly responsive execution

As part of the interview portion of this report, James Bickerton — the Global Head of Client Development at HSBC — explains some of the key successes HSBC has achieved as a result of an initiative focused on a data-driven digital transformation. These successes include:

  • An aggregated $4 trillion in payment flows
  • The launch of 110 cross-functional, multi-region origination pods
  • The processing of more than $120 billion in risk-weighted assets via algorithms capable of identifying underlying commercial drivers
  • Hundreds of thousands of hours of capacity released through the simplification of day-to-day tasks
  • A fully restructured global institutional investor coverage model

Bickerton goes on to state that:

“Wholesale banking has always relied on relationships, and informing those relationships with a greater understanding of clients and their strategies with data-driven insights takes relationship-driven banking to another level.”

Final Thoughts

Staying ahead of trends is one thing — making the most out of the trends and turning them into success-ridden opportunities is another.

At CPQi, our talented team of FinTech experts has nearly two decades of experience employing the latest technologies in banking, implementing advanced digital solutions, and leveraging in-depth industry expertise for the betterment of our clients’ business models.

We have the custom solutions your wholesale bank needs to thrive in 2023, including staff and resource augmentation and a whole assortment of transformational services that leverage advanced data and analytics.

To learn more about what CPQi can do for your institution, book your first consultation today.

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