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In the new world of #digital #payments, many #technology developments are driven by #customer #experiences. #Banks are investing heavily in technological innovations and #Fintech relationships to provide better payments experiences to their customers. Even so, there is a stark contrast between the payments experiences of retail customers and #corporate customers. While retail consumers can enjoy seamless, immediate, always-available payment services with advances such as mobile and contactless payments, corporate customers struggle with rigid paper-based processes, fragmented products and relationships, poor visibility into payment flows and more.
However, I see a shift starting to happen in the corporate payments landscape as corporates start demanding the ability to transact in real-time, in an omni-channel environment, 24/7. Banks such as HDFC, HSBC, and others are already launching their corporate mobile solutions in areas including cash management, trade services, reconciliation, authentication and operational support.
Market dynamics are driving corporates to restructure their operating models, and are driving banks to adapt their corporate payments offerings to meet these new expectations (as shown in Figure 1):
The (re)emergence of virtual accounts is a key trend to watch, with banks such as BNP Paribas, RBS and Barclays leading the way in offering virtual accounts to their corporate customers. Virtual accounts provide corporates with better control over their cash management accounts, reduce administrative costs and optimise the number of real bank accounts, thus eliminating the need for cash management products such as notional pools (at least in the same currency). Banks can also consider extending virtual account management features in a multi-bank environment for the corporates who bank with multiple banks.
Corporate portals are another product that banks such as CitiDirect, J.P. Morgan and Barclays have in their corporate payments service portfolio. A corporate portal presents corporate customers with a single view of all their banking services and activities, and for banks it can support greater cross-sell of products, making it easier to roll out new and enhanced digital services.
Key features include:
- Multichannel access, seamless user experience across web, mobile devices and offline channels
- Availability of 24/7, real-time, up-to-date information
- Integration with corporates’ ERP systems and banks&8217; infrastructure
- Tiered dashboards at the enterprise/product/business level with decision-making tools
As banks strive to deliver against corporates’ expectations, they need to invest in new payments technologies, move closer to corporate customers, and integrate themselves into their value chains. If banks themselves don’t move quickly to seize this opportunity, then somebody else will do it first—thus relegating banks to back-office utilities running accounts for others’ front-office payments offerings.
At Accenture, we recommend banks focus on the following three key areas to sustain corporate relationships and grow future revenues from an expanding array of solutions centred around corporate payments:
- Become a trusted adviser on corporate customers’ problems; don’t just sell corporate payments products.
- Collaborate and partner (instead of competing) with Fintech companies to provide innovative digital services.
- If you’re a local bank, use digital to stay relevant and compete with global banks.
Accenture recognizes the challenges banks will have in balancing innovation with handling ‘run-the-bank’ issues such as regulation and the inflexibility of legacy systems. Those banks that can execute on both fronts most effectively will win out in the race to forge durable, profitable relationships with their corporate customers.
Read more in the full report, Transforming the corporate payments landscape
The post Corporate payments: Catching up with the customer experiences of digital transactions appeared first on Accenture Banking Blog.
#Payments is an important part of any bank’s business. But for some, like #Fifth #Third, payments business is an area of differentiation. In 2016, revenue from payments business made up 15% of the bank’s total revenue, at $ 973 million. The bank processes 680 million in annual transactions, and $ 32 billion in annual spend, Tim Spence, […]
A new report by Swisscom’s think tank e-foresight and the Institut für Finanzdienstleistungen Zug (IFZ) found that the vast majority of #banks are #falling to #meet consumers&8217; #digital #needs, notably when it comes to small and medium-sized enterprises (SMEs).
The research program compares the digital offerings of 50 retail banks and the needs of 473 SMEs. Most particularly, it focused on five specific areas: e-banking, communication channels, payments, financing and banking-related products.
The study found that 66% of the surveyed banks are late followers, 29% are followers and only 5% are considered as being first movers.
Late followers are those that haven&8217;t launched any digital initiative or that has only launched isolated initiatives in terms of offerings to SMEs.
Followers have proposed their first products and are serving customers.
First movers have advanced rapidly toward digitalization and are at the forefront in term of their digital offering to SMEs.
For e-banking, although a number of banks are already offering solutions, the level of innovation remains low and corporate clients are demanding more digital solutions and functionalities.
80% of banks are offering push notifications via email or text message and 26% are offering personalized homepage. Only 8% are offering accounting software solutions, although 62% of clients said they considered these solutions as being important or very important.
Another area where banks are falling behind is the communication channels. Despite clients claiming that web chat, the ability to book meeting appointments online and video format advisory are important or very important, only a few banks are offering these services.
SMEs are also demanding various digital payments solutions including online and mobile payments solutions, which a number of banks are already providing.
Alternative financing solutions is expected to grow in popularity, and SMEs are requesting online onboarding processes notably to open business accounts (54%), but also for online mortgage applications (29%) and renewal/extension (43%). Less than 10% of banks surveyed are currently offering any of these solutions.
Finally, as for banking-related products and services, SMEs said that are interested in online factoring (17%) while only 2% of the surveyed banks are actually offering this service. 21% of SME clients said they are interested in the possibilities to bundle through business networks, but only 4% of banks are proposing this. Finally, 10% of the banks said they offer insurance products online, while only 5% of SMEs believe this is actually important or very important.
The report advises banks to start considering SMEs as an entirely separate segment in their strategy. Banks should focus on building and delivering solutions that SMEs are actually demanding and offerings that effectively help them, notably in areas that include e-banking and online assistance and advisory. Banks should also develop “an intelligent combination of banking and non-banking services” to build customer loyalty.
&8220;Globally, banks are only at the beginning of their digitalization efforts in products for SMEs,&8221; the report says. &8220;Most of them have been primarily focusing on the retail banking segment.&8221;
&8220;Digitalization is not an end in itself, it must be put in place to better and/or more easily serve clients&8217; needs. (…😉 Corporate clients consider the most relevant areas as being solutions and functionalities related to transactions and auto-administration in e-banking, which simplify their daily activities or improve their processes. These aspects demanded by corporate clients are currently not provided by any of the banks.&8221;
Featured image by IFZ
The #Finovate Group, the #fintech event and information venture, has #been #sold to #Informa Plc. The sale closed last April, but has not been publicly disclosed. Terms of the deal are not known. Jim Bruene, owner of The Finovate Group, confirmed to Bank Innovation that the company has been sold.Read More