PAYMENTS ARE A HUGE OPPORTUNITY FOR BANKS—PARTNERING WITH FINTECHS CAN HELP THEM GRAB IT
Fintechs Help Banks Innovate Securely
Let’s face it: Banks aren’t naturally set up to innovate.
To come up with the next great idea, companies have to be prepared to move fast and break things. Banks are intentionally designed in ways that prevent this kind of behavior. They are sturdy and layered in security and approvals, and for good reason—we need the backbone of our financial system to be stable and reliable.
Shift Banking Tasks to Electronic bill payment and presentment
Still, banks must respond to changing demands from their customers, from consumers to multinational businesses. Due to Covid-19, consumers and companies alike now expect to be able to conduct more banking tasks electronically, including bill pay.
Although EBPP is a well-established concept, the market remains surprisingly analog: Almost 40% of bills are still managed and paid offline. Meanwhile, banks’ share of EBPP has slipped precipitously in recent years, as competitors from startups to major companies have taken market share and businesses have opted to implement nimble, biller-direct solutions.
The definition of EBPP has grown
At the same time, customer needs and expectations have expanded. The set of services within what has previously been called EBPP has evolved into a multifaceted core component of integrated receivables. Today’s solutions remove the resource-intensive cash application process, speed up the payment cycle, and improve client cash flow for banks’ commercial clients.
This expansion of expected services works to banks’ advantage. It presents openings to capitalize on the close relationships they already have with their customers: Bank clients may already be fully integrated with the bank’s systems, and often look to banks to serve as trusted advisors who have the expertise and resources to help them navigate a variety of financial challenges and opportunities. Playing this role gives banks a unique advantage over a fintech startup with limited banking experience—both to earn this business and to deliver it effectively.
Meet Customer Expectations with a Fintech Partner
Banks should step up to this challenge by offering clients enhanced payment processing services that are fully integrated with pre-existing systems. If they don’t, they risk greater churn as customers conclude that they are outgrowing their bank’s payments abilities.
Building out modern billing and presentment solutions is a time- and resource- intensive task that most banks can’t afford to take on. Instead, banks should pursue partnerships with fintechs. Partnering with the right fintech companies can help banks deliver innovative solutions, deepen existing commercial client relationships, and increase revenue from the growth in electronic payment processing.
Read more about EBPP: Leveraging a Fully Integrated End-to-End EBPP Solution