Translation Services for Banking and Finance
Growth in Financial Translation
In the early to mid-1990s, the privatization of large government-owned utilities across continental Europe, led to a surge in capital markets advisory work for both domestic and international investment banks, and leading financial institutions. Although banks were not previously averse to cross-border business, with many already establishing a presence in countries outside their local domain, capital raising from international markets appeared to accelerate during this period. Large European utilities were taken public via listings on multiple stock exchanges and, as a consequence, shares in these companies were also offered through international markets. This was a boom time for the banking and legal industries but also for those companies providing support services to the capital markets.
Language services were one of those industries that saw a significant increase in demand for financial translation with initial public offerings and, in some cases, secondary and tertiary offerings of shares in these state-owned entities. For a number of these projects’ prospectuses (documents) were being created for over 20-different jurisdictions, with investor and regulatory information translated into 19+ languages. The timelines were aggressive and the importance of managing multiple languages and delivering accurate translations on time was a challenge. The language industry continued to accept and deal with this challenge well into the 2000s with China’s transformation from a centralized economy to a market economy. Once again, localization companies were called upon when China’s state-owned enterprises were privatized, translating prospectuses for the international markets.
How is Retail Banking Changing and What Does it Have to Do with Language Services Providers (LSPs)?
Although investment banking has long operated across borders, the retail banking industry has been more domestic-centric with international banking partnerships being the preferred option to facilitate cross-border transactions. The impact of ongoing regulation and the significant changes in technology and customer behavior is now challenging the traditional banking model. Language services providers (LSPs) are also having to adapt to the same challenges to ensure their businesses not only survive, but prosper in a changing environment.
With industry transformation comes opportunity, particularly for LSPs who have long had to engage with new and transformative technology, adapt to changing regulations, and proactively engage with customers to deliver impactful multilingual content. With the emergence of challenger banks and digital payment gateways, the traditional retail banking experience is changing. Interestingly, emerging markets are leading the charge in ‘banking the unbanked,’ and have benefited from not being hamstrung by legacy banking systems and operating models prevalent in established markets. With governments granting regulatory licenses to banks with operating platforms built for smartphones or tablets, the physical presence of bank branches in mature economies is becoming less of a customer necessity – in some cases controversially so!
The emerging markets have driven real transformation in money services for consumers. East Africa is a great example of mobile-based payment and online financing services; enabling deposits and payments using a network of agents and customers’ cell phones. Approximately two-thirds of the adult population in Kenya use this method. These telecom-owned and operated entities partner with domestic banks to broaden their services to offer loans, overdrafts, insurance, and wealth management with customers being able to build credit scores and access both individual and group savings products.
Opportunities for Technology Astute Global LSPs are Here and Now!
If we go back to that period of increased capital markets activity in the mid-1990s, translation was about ensuring that investor and regulatory information was available to potential investors in document form. In addition, the marketing of new banking products and services was delivered in leaflet form at bank branches, likely in conjunction with an in-person meeting. With the evolution of cloud-based banking platforms, customers are demanding that multilingual content be available digitally. With many digital payment gateways facilitating payments across borders and in multiple currencies, then product instructions, legal, and marketing material have to be available in multiple languages. This availability of financial services to millions of people who have mobile phones but do not have bank accounts, or access to financial services, is creating a whole new potential market for not only the banking industry but also for LSP services.
Both challenger banks and digital payment companies will require website localization to inform users and potential new customers of their services in multiple languages as they reach out to new markets. Whether it be product information, marketing, legal, finance, or customer communications; the whole point is to make this information available and readable via mobile phones and tablets. Experience in software localization for mobile apps will become a necessity and having global digital marketing experience to collaborate with customers and their digital agencies will be essential. As governments influence through regulation rather than ownership, banking regulations will play a part in the expansion of these services across new markets with global LSPs being asked to support this expansion with financial translation services.
PWC in their ‘Retail Banking 2020 Report’ stated that in the banking industry ‘Technology is becoming a potent enabler of both customer experience and effective operations.’ Sound familiar?
