The digital transformation of commercial banking is at a pivotal moment. While retail banks have made significant strides in digitizing customer experiences, commercial banks are only now accelerating their own journeys—driven by competitive pressure from both established rivals and digital-first entrants, as well as rising expectations shaped by improved retail banking experiences. Yet, the path for commercial banks is uniquely complex, marked by a diverse customer base, non-standard products, and a legacy of relationship-driven service. This page explores the distinct challenges and opportunities facing commercial banks as they embrace digital transformation, drawing on insights from the Global Banking Benchmark Study and executive interviews with industry leaders.
Unlike retail banking, where customer journeys can be standardized and streamlined, commercial banking serves a heterogeneous client base—from sole traders and small businesses to large, multinational corporations. Each segment brings its own requirements, regulatory obligations, and expectations for personalized service. This diversity makes the digitalization of customer journeys a formidable challenge:
Despite these hurdles, commercial banks are re-orienting their transformation programs around customer journeys and experience. According to the Global Banking Benchmark Study, 72% of commercial banking respondents agree that customer journeys are now central to their digital strategies. However, most banks are still in the early stages of implementing operating models built around digital customer journeys, especially for larger and more complex clients.
One of the most significant opportunities for commercial banks lies in embedded finance—the integration of banking services directly into clients’ business processes, platforms, and marketplaces. This approach enables banks to:
However, rolling out embedded finance is not without its challenges. The wide variety of technology platforms used by commercial clients—ranging from accounting and ERP systems to bespoke treasury solutions—requires banks to develop flexible, API-driven architectures. Internal systems and operations, often fragmented and siloed, must be modernized to support seamless integration. Moreover, embedded finance can cut across traditional product silos, necessitating new models of business ownership and collaboration within the bank.
Digital transformation in commercial banking is not just a technology challenge—it is an organizational one. Success requires breaking down product and functional silos and building cross-disciplinary leadership teams with expertise spanning technology, data, operations, and customer experience. Executive interviews highlight several key imperatives:
A defining feature of commercial banking is the central role of relationship managers, whose expertise in understanding client needs and negotiating non-standard agreements remains a key differentiator. As banks digitize, the challenge is to blend these human interactions with digital journeys in a way that enhances, rather than diminishes, the client experience:
Neo-banks and digital challengers, while successful in serving smaller commercial clients with standardized needs, are also recognizing the need to incorporate human expertise as they move upmarket. The future of commercial banking will likely see a convergence between incumbents seeking to digitize and challengers adding human touchpoints.
Commercial banks see significant potential in combining data from different sources to better understand and anticipate customer needs. Richer data resources will enable:
Key obstacles remain, including data security and privacy concerns, inconsistent data taxonomies, and siloed legacy architectures. Overcoming these challenges will require investment in modern data platforms and a culture of data sharing and collaboration.
The digitalization of commercial banking is a journey that extends beyond technology to encompass organizational structure, culture, and leadership. Banks that succeed will be those that:
While the road ahead is complex, the opportunity is clear: commercial banks that embrace holistic, customer-centric digital transformation will be best positioned to compete, grow, and lead in the next era of banking.
Publicis Sapient partners with leading commercial banks worldwide to accelerate digital transformation, helping them navigate complexity and realize a digital-first future.