An Executive Insight with FISPAN Co-Founder Clayton Weir as he shares more about what users are looking for within bill payments, how FIs can enhance those existing services to stay competitive and the challenges they face when creating these features.
Digitization in the financial space is imminent, with many companies believing that bill payment digitization is crucial for success and growth. With one study illuminating the persistence of manual finance processes (Finance leaders reported that 43% of their end to end AP functions remain manual), it’s clear that seamless bill payment features are needed to overcome the unnecessary time spent on these tasks.
As corporate demand for B2B payments continues to shift towards a digital approach, Financial Institutions (FIs) can tap into APIs to deliver the innovative payment solutions their clients are craving. The use of APIs can help streamline the bill pay experience for their business clients; Clayton Weir, FISPAN’s Co-Founder, talks about the shift in payment expectations from commercial clients and how FI’s can leverage APIs to enhance their existing services and infrastructures.
Read The Full Q&A Below
In what ways are businesses’ bill payment needs shifting, and how are these changes impacting FIs as they look to engage and retain their corporate clients? What are businesses expecting out of their payment experiences or features today?
In terms of bill payment needs, those are doing just fine. In fact, they are more and more becoming a commodity, since building a payment service is now easier than ever before. What we’re seeing is that a lot of the competition is on pricing, which is a very strong indicator of a commodity. What’s really missing for the users of bill payments is the surrounding infrastructure that makes payments not just cheaper or faster but [also] easier to operate on the second- and third-degree implications of those payments, [such as] cash flow impact, forecasts and optimizations, to name a few. To make their payment services competitive, FIs need to provide new services as well as enhance existing services and infrastructures that help with this competitive reality. Businesses today expect that making payments won’t make them work extra hard to understand the short-term and long-term effects on their cash flow. Enhancing existing services and streamlining the infrastructure can help them do just that.
What are some of the challenges FIs face when it comes to creating seamless bill pay features for their corporate clients?
This really comes down to a lack of ERP connectivity between the bank and the user’s ecosystem. This ultimately makes users work harder to keep their books in order and up to date. Enabling corporate clients to process all their payments in one system so they can see everything would be of great benefit to them. FIs should create that connectivity in-house or [reach out] to leading FinTechs in this space to create the ERP connectivity their corporate clients require.
How can technologies such as APIs enable banks to create these tools and meet businesses’ changing needs?
APIs are really the key to this integration and [to] meeting corporate clients’ changing needs. APIs can act as an accelerant for banks to get digital innovations to market faster and improve user experience and connectivity for their corporate clients. Whether an FI creates it in-house or partners with a FinTech, the use of APIs can seamlessly connect select platforms to banking products and services.
Also, by leveraging APIs, FinTechs and FIs can improve users’ experiences through embedded banking and new service offerings. This connectivity and data integration provides the infrastructure required for seamless business banking and B2B payments to thrive. If banks embrace open APIs, they can work with partners to bring their banking products directly to their clients in new ways. In addition, banks will benefit from a better understanding of their customers’ interactions and preferences. Instead of having multiple touch points, FIs can integrate their banking capabilities where their clients live, providing a holistic commercial banking experience, including, but certainly not limited to, seamless payments.
In what ways do you expect to see online bill payment continue to shift and develop over the next several years, especially as businesses begin to use more of these tools for B2B payments?
Expansion of card products beyond expense management seems to be the trend of late. This leads to the consolidation of expense management and AP automation tools to allow users to have the same process and tools for both. The real driver for this change is in capturing more interchange revenue as well as accessing a bigger market.
Learn more about the current state of commercial banking in this free FISPAN report made in collaboration with PYMNTS.
More About Clayton Weir
Clayton R. Weir is the Co-Founder of FISPAN. He shapes FISPAN’s vision and execution, with an emphasis on people, product, and client success.
Over the last five years, Clayton has led FISPAN to become the market leader in embedded banking. FISPAN banking partners collectively hold $11 trillion in assets and include 11 of the top 40 banks in North America. Clayton is also the host of FISPAN’s If I Ran the Bank podcast, hitting on the hottest topics in banking, finance, and the future of payments.
Interested in how you can bring a more personalized customer experience for your commercial clients? Contact us for a demo to see how embracing open banking can help you maintain a competitive advantage.