Very Sophisticated. The Irresistible Rise of Corporate Sophistication?

The rise of corporate sophistication in finance. What is it? And how can banks remain relevant to resist it?

Virtually unchallenged, banks provided corporate customers with services from payments processing to business extension financing. Then came much greater financial Corporate Sophistication. Banks now need new strategies, and new approaches, to retain and regain business that used to be assured. In the face of growing competition, effective resistance is all about relevance.

Today, ever-greater corporate financial sophistication, combined with new and aggressive competitors, cuts into previously guaranteed business.

The stakes are high. Take corporate loans for example. Just in the Euro currency area, if these loans (with average APR of 3.5%) decreased by 50% from now until 2025, banks’ income would drop by around EUR 75 billion (benchmarked against ECB 2013 data).

Level of corporate sophistication


Effective Resistance Requires Relevance

The only viable form of defense is to react fast – driven by staying (or becoming) totally relevant to the needs of customers. What specific steps can banks take to survive the rise of corporate financial sophistication?


Offer Deeper Intimacy

Successful institutions will recognize and then leverage the opportunity to create deeper intimacy with their corporate customers.


Forget “Not Invented Here”

No successful bank will work effectively in isolation. Instead, think partnerships and “co-opetition”.


Stay Relevant

Offer the services customers really need, want and expect (and exceed their expectations with relevant innovations).

Corporate financial sophistication is a real and present threat to heartland bank revenues. But it also presents significant opportunities, given the right responses. Read Capco’s new white paper, “The irresistible rise of Corporate Sophistication?”, to gain greater insight into the issue.

This paper is written by our expert practitioners. It gives you a clear view of the causes of growing corporate sophistication, the actual and potential effects on your business, and the steps you can take to secure and grow an important part of your market.