Financial Services Practice

The data and analytics

edge in corporate and
commercial banking
As corporate and commercial banks serve increasingly complex
needs, new data- and analytics-powered tools can help the front line
understand their customers and improve sales.
by Denis Francis, Imke Jacob, and Fadi Zoghby

March 2023
 With revenues of $2.3 trillion, corporate and
commercial banking accounts for a significant
share of total global banking revenues (Exhibit 1).
In the United States, for instance, corporate and
commercial banking revenues have advanced
at double the rate of GDP growth.1 However,
succeeding in this sector has never been more
challenging. Corporate and commercial clients
are no longer satisfied with the traditional lineup
of loan and credit options. They are looking for
personalized offerings drawn from a wider array
of services—including transactional, fee-based
services such as digital, real-time payments and
beyond-banking features like spend analytics and
granular liquidity and cash forecasting. Clients also
expect banks to have the capabilities and industry-
specific expertise to work with them across their
global supply chains and help them tackle new
challenges, including decarbonization. Adding
to the challenge are fintechs, which are vying
Web <2023>
<DataAnalyticsEdge>
Exhibit 1
Exhibit <1> of <3>
Corporate and commercial banking will continue to represent a significant
share of overall banking revenue.
Global banking revenue by segment, $ trillion
5.7
5.0 5.2
2.7
Corporate and 2.4
2.3
commercial banking¹
3.1
Retail banking 2.7 2.8
2022 2023F 2024F
¹Excludes investment banking.
Source: McKinsey Panorama Global Banking Pools
McKinsey & Company
1
Federal Reserve Bank of St. Louis; IHS Global Insight; McKinsey Panorama—Global Banking Pools.
2 The data and analytics edge in corporate and commercial banking
for market share in domains such as payments,
lending, and securities trading.
Much of the responsibility for meeting such complex
client demands falls upon a bank’s frontline staff,
its relationship managers (RMs). These employees,
who are responsible for the organization’s largest
customers, already have a lot on their plates. The
intensity of today’s needs often leaves RMs too busy
with a subset of existing customers and without
enough time to develop new opportunities for the
bank or find the right solutions for other valuable
clients. According to McKinsey interviews with
executives at more than 15 banks, many report that
they struggle with client acquisition, with a majority
of their RMs acquiring less than five new clients a
year. This shortcoming leaves considerable revenue
on the table, both from new opportunities and from
untapped value propositions that could benefit
existing customers.
CAGR forecast, 2022–26, %
6.1 6.4 Overall 6.3
2.9 3.0
Corporate and
6.4
commercial banking¹
3.2 3.4
Retail banking 6.2
2025F 2026F
Next-generation frontline technology
Over the years, banks have introduced a range
of technological tools to help RMs serve clients
more efficiently and effectively. Many of these
solutions, however, are neither user friendly nor
comprehensive in their use of data to generate
insights for RMs. Account planning, client potential,
and pricing solutions, for instance, are not fully
automated and require additional time and effort
from RMs. In addition, the data inputs are often
incomplete and seldom merge internal and external
sources to create a full picture of a client’s needs
and circumstances.
RMs better understand their customers and lead to
new sales in each customer relationship.
Powered by data, these AA-enabled workbenches
offer a variety of tailored insights, such as new
client opportunities and next products to buy,
calculations of client revenue potential, detailed
pricing guidance, and identification of clients at risk
of churn (Table). Designed to be a hub that includes
all the information needed by an RM or team leader,
these platforms help frontline employees navigate
the complexity of client expectations and serve
clients better.

Some banks are now taking a different approach.
Instead of providing the front line with many tools for
different tasks (at one bank, we counted more than
30), they are using data and advanced analytics
(AA) to build a unified, easily navigable, and
intuitive platform within the customer relationship
management (CRM) system. This approach can help
In a McKinsey survey of 70 corporate and
commercial banks conducted in September
2022, all respondents indicated that they have
accelerated their adoption of AA-enabled digital
frontline solutions across geographies and tiers
over the previous two years. But many organizations
are still learning how to create and implement these

Table. Leading corporate and commercial banks use advanced analytics to empower relationship
managers in key areas.

Pre-client meeting— Client meeting— Post-client meeting—

preparation negotiation tracking

Corporate and Prospecting Product offering Target tracking

commercial banking Prioritization Pricing Refinement
process Demand/opportunities

RM needs Identify likely-to-convert Price multiple products Set targets based on

prospects, assess client at the same time and client potential, monitor
potential, recommend support price nego- sales execution, and
products, and pinpoint tiations and what-if identify behavior tied to
customers likely to churn scenarios high performance

Advanced analytic Prospecting wallet sizing Reference pricing Target setting

models Next product to buy Pricing leakage RM effectiveness
Probability-to-churn Churn management

McKinsey & Company

The data and analytics edge in corporate and commercial banking 3

 solutions. Roughly three-quarters of the surveyed
banks said they were still in the experimentation
phase, with some struggling to reap the rewards of
their investment (Exhibit 2).
Impact of a successful advanced
analytics initiative
An integrated, data-driven approach represents
a step change in how frontline employees
use technology, and can lead to significant
performance and efficiency gains. According to
pilot testing McKinsey undertook with multiple
banks, RMs who used AA workbenches had
9 percent portfolio growth over a 12-month period,
while control groups who did not use workbenches
saw 5 percent growth. They also spread this
growth across more clients, received five times
more cross-selling ideas, and spent 90 percent
less time on account planning.
This level of performance can generate significant
top-line growth for a bank. A leading European
bank, for instance, used client data to build an
AA model that streamlines account planning
and quantifies the revenue potential of every
existing and prospective customer in the market.
Web <2023>
<DataAnalyticsEdge>
Exhibit 2
Exhibit <2> of <3>
Banks are at varying stages in their implementation of frontline advanced
analytics.
‘Where do you stand with your advanced analytics efforts?,’¹ % respondents (n = 28)
Started, still experimenting
75
¹Respondents who said they have “Not started” is 0%.
Source: McKinsey webinar survey of global corporate banking leaders, September 2022
McKinsey & Company
4 The data and analytics edge in corporate and commercial banking
Putting the data into the hands of RMs led to
revenue growth that was three times faster than
the market.
Similarly, a regional bank in the United States
used its AA workbench to boost the number of
new customer opportunities by five times and
generate three to four new suggested actions
for each existing client. As a result, the bank’s
corporate and commercial revenue is on track
to increase by more than 20 percent over three
years. And at a leading bank in the Middle East, AA
models improved lead conversion by 20 percent
and enabled top-line growth four times greater for
pilots than for control groups.
In addition to these results, banks adopting AA
workbenches have seen other benefits:
— better prioritization of clients based on their
intrinsic needs and their value generation
potential for a bank, rather than segmentation by
wallet, enabling RMs to devote the appropriate
amount of time and attention to accounts
— more time for RMs to focus on value-
adding activities
Leading, cutting-edge
Programmatic, scaling
21 4
An integrated, data-driven approach
represents a step change in how
frontline employees use technology,
and can lead to significant
performance and efficiency gains.
— an improved coverage model that encompasses
all product offerings
— key information at RMs’ and team leaders’
fingertips, enabled by a new front-end workflow
in the CRM system
— transparent RM performance management and
accountability, with the ability to set escalation
paths to sales managers, monitor initiatives,
and benchmark frontline performance against
targets and peer institutions
Implementation matters
In AA workbench initiatives, the dominant factor
associated with success is frontline adoption. Even
the most robust and sophisticated tools are of little
consequence if RMs don’t see the benefit. The best
way to set up an initiative for success is to place the
experience and perspectives of frontline employees
at the center of the process. The following seven
practices are common at banks with high-impact
AA workbench initiatives.
Presenting new front-end tools as part of
an overall strategic growth program
Giving RMs and other frontline workers an AA
workbench as a stand-alone initiative is far less
appealing than positioning it as an important pillar
The data and analytics edge in corporate and commercial banking
of a broader strategic plan. If RMs know why the
workbench tools were developed and how the
tools will help them deliver on a bank’s three- to
five-year agenda, they are far more likely to want
to adopt them.
Starting with use cases prioritized
by the front line
Although a bank’s analysis may identify a set of
high-value use cases, selection of initial use cases
should not rely solely on financial criteria. Banks
can motivate the front line by inviting RMs to
discuss priorities and select the three to five use
cases they consider most important. In practice,
frontline-prioritized use cases have included client
acquisition (at a bank in China), trade finance
cross-selling (a bank in the Middle East), client
potential (a North American bank), and markets/
foreign-exchange cross-selling (a European bank).
Once the workbench is up and running, the
bank can add functionality prioritized by bank
management. In our September 2022 survey,
we asked managers to identify their top two
use cases for advanced analytics. The largest
percentages selected customer potential or
wallet sizing and RM productivity (Exhibit 3).
Environmental, social, and governance (ESG)
use cases, including net-zero analytics, also are
emerging as a priority.
5
 Web <2023>
<DataAnalyticsEdge>
Exhibit 3
Exhibit <3> of <3>
Corporate banking leaders say the highest-priority use cases will be
assessing customer potential and relationship manager productivity.
Priority use cases for advanced analytics,¹ % of respondents (n = 57)
Customer potential/wallet sizing
Relationship manager productivity
ESG/net-zero analytics
Retention/churn
Pricing
Risk management/early-warning services
Supply chain analytics
Inflation and interest rate sensitivity
of client business model
Team efficiency
¹Question was asked: “What are your top 2 frontline advanced analytics use case priorities for 2022 and beyond?”
Source: McKinsey webinar survey of global corporate banking leaders, September 2022
McKinsey & Company
Investing in RM user experience
The ideal AA workbench is seamlessly embedded
into the front line’s daily workflow. We have seen
significant differences in RM adoption based on
how much effort banks put into user experience.
Some banks, for instance, have assigned their best
designers (such as those who build mobile apps) to
create RM journeys that are easy to use, intuitive to
navigate, and free from complicated messaging. At
one bank, additional data were added to the main
client screen in a way that immediately shows RMs
the upside potential across different products.
Another important success factor that improves the
RM user experience is a streamlined technology
stack. Instead of adding yet another frontline tool,
banks see a much more positive response from
RMs when they use the opportunity to merge all
existing functionality into one simple log-in and
replace legacy tools, such as spreadsheets for lead-
tracking, with digital ones.
6 The data and analytics edge in corporate and commercial banking
21
18
12
11
11
11
7
5
5
Creating a dedicated AA team for the job
Since talent in data, analytics, and digitization is
scarce, banks sometimes charge their digital teams
with serving retail banking as well as corporate and
commercial banking. However, learning to speak
the language of RMs and getting domain expertise
in corporate and commercial banking often requires
full immersion. Banks likely will find it more effective
to deploy a small, dedicated team of five people than
to shuffle 15 to 20 people across businesses.
Winning RMs’ trust
Since RMs remain a primary driver of client
satisfaction, the initial version of an AA workbench
must resonate with them. Successful MVPs not only
deliver actionable insights but include high-interest
information such as the names of other RMs who
recently won comparable deals with similar clients.
In a 2022 McKinsey Finalta Corporate Banking
Digital Benchmark survey, 63 percent of banks
reported they had integrated real-time financial
 monitoring that allows RMs to track their own
Find more content like this on the
performance. In addition, more than 50 percent said
McKinsey Insights App
they have embedded next-action recommendations
tailored to specific clients.2
Enrichment over time
Successful AA workbench initiatives have a clear
road map for the enhancement and augmentation of
use cases. This includes upgrading them with new
and granular data sources (for example, transaction
Scan • Download • Personalize
data) and more sophisticated modeling techniques.
It also entails adding new use cases, such as ESG
analytics, and expanding the use case delivery
channel, which lets RMs deliver ideas directly to
clients and follow up through digital channels.
Adapting the operating model
Data and analytics alone can’t boost banking
revenues. To maximize the benefits of advanced
analytics, banks need a holistic approach that
includes training RMs in getting the most out of a
new workbench. They also should align incentives
between RMs and product specialists, such as
through shared client visits and other joint key
performance indicators.
Denis Francis is a partner in McKinsey’s Cologne office, Imke Jacob is a partner in the New York office, and Fadi Zoghby
is an associate partner in the Dubai office.
Designed by McKinsey Global Publishing
Copyright © 2023 McKinsey & Company. All rights reserved.
2
Finalta Digital Corporate Banking Benchmark 2022. Survey covers more than 50 banks globally.
The data and analytics edge in corporate and commercial banking
As corporate and commercial banks strive to
serve increasingly complex client needs, data
and analytics have become table stakes. Initially,
leading banks saw success from using data- and
analytics-powered frontline tools to better serve
their midsize business clients. They are now in the
process of scaling this success across the rest of
the corporate and commercial sector, from global
multinationals and large domestic companies to
small businesses.
The next generation of data- and analytics-powered
frontline tools helps RMs prioritize clients and
opportunities. They also free up RMs to focus on
value-adding activities and provide transparency
on key information, including RMs’ performance.
Cracking the code on digital and analytics is hard,
requiring banks to successfully tackle strategy,
talent, agile delivery, technology, data, and their
operating model. But getting it right can lead to
disproportionate impact and enable banks to
compete in the high-growth areas.
7