Disrupting the All-or-Nothing Mindset in Banking

Nine and a half times out of 10, you don’t eat the entire pie during dessert. Instead, you opt for a slice – maybe two.

It’s the same with financial institutions and their services.

Most banks don’t originate every type of loan or allow customers to open every type of account in the market. But when they are in need of a specific capability, such as banking as a service capabilities or acquisition, development and construction financing, it can be difficult to find a solution that does only that.

In certain cloud-hosted environments, however, banks can create the exact solution they need for their business and customers.

In this episode of Reinventing Banking, a special podcast series brought to you by Bank Director and Microsoft Corp., we speak to Robert Wint, senior product director at Temenos, a cloud-based banking technology solutions provider.

Wint describes how Temenos’ cloud banking focus is helping financial institutions spin out specific, individual technologies and launch them as stand-alone solutions. He brings to the table some impressive case studies, and introduces a potentially new term to our American audience: composable banking.

Temenos reports that its technology is used to bank over 1.2 billion people. Listen to find out how.

This episode, and all past episodes of Reinventing Banking, are available on FinXTech.com, Spotify and Apple Music.

Driving Revenue with Better Treasury Management

accounting-7-22-16.pngTreasury services are a large source of fee revenue for banks – selling payment rails, wire services and other bread and butter offerings. However, when it comes to small and mid-size companies, banks can and should be a source for more than just payments and transfers. There is a huge opportunity to be generating more revenue for the bank, and perhaps more importantly, to make themselves an indispensable part of the client’s business operations.

In previous years, treasury services professionals had no need to understand their customers’ finance and accounting situation. They were selling traditional bank services, in which they were well versed. However, today’s increasingly complex fintech environment means that these professionals have a huge opportunity. There are far more technological products and solutions for banks to offer that improve their customers’ lives; and the advantage of offering them is that your customer is less likely to go somewhere else to get them. By better understanding the pain points their customers feel from a business and operations standpoint, they can offer technology that can ease customers’ headaches and drive incremental revenue for the bank.

Accounting Systems–The Heart of the Company
For growing companies, having the right accounting system is vital. Everything from payroll to accounts payable runs through it, meaning mistakes or inefficiencies can lead to everything from cash flow problems to security breaches. For these reasons, every treasury services professional should have basic knowledge of the major accounting systems and should start the sales process by asking what system a company uses. From there, they can begin to understand the company’s workflow and how it might be improved.

Increase Incremental Revenue
By understanding the customer’s pain points, a treasury services manager who is well-versed in the language of accounting will be able to identify and offer solutions to streamline processes, save time and increase security. Perhaps the customer is spending hours each week manually inputting invoices. Offering that customer an automated invoice capture solution will save the accounting team time and resources. Perhaps the customer still is filing receipts in a filing cabinet and could use a document storage system to enable faster search functionality.

Deliver End-to-End Solutions
By fully understanding accounting systems and processes and upselling additional services where appropriate, the bank can deliver an end-to-end solution for the customer and generate more revenue for the bank. For example, if the bank is an issuer of corporate credit cards, there is the opportunity to drive more payables onto those cards and drive more interchange revenue to the bank.

Everything from invoice capture, to accounts payable, to payments and payroll can all flow seamlessly through the central hub. Offering multiple products together will ensure proper integration and mean that systems aren’t cobbled together or require work-arounds. And, these solutions offer additional benefits such as fraud protection, increased visibility and cash flow management and security controls.

However, the treasury services professional’s job doesn’t have to stop after they make a sale. By keeping in touch regularly and nurturing the relationship, he or she will be able to identify when it’s time to upgrade systems. For example, a small business may start with QuickBooks but eventually outgrow the system and graduate to a more robust accounting platform like Intacct or NetSuite. Keeping an eye on data that indicates account health, such the volume of payments or other activity, could be a good indicator of when to check in with them.

Make Your Bank Sticky
It’s all too easy for a business to switch banks–especially if it is using the bank only for payments and transfers. Customers can be fickle and easily lured away by a slightly better rate or lower fee structure. But a treasury services professional can be at the front lines of customer retention by showing value that makes it difficult for customers to leave.

Studies have shown that online bill payers are twice as likely to remain active banking customers and as high as 70 percent less likely to leave the bank. So it stands to reason that the more products and services a bank can offer, the harder it will be for the customer to leave. As a treasury services professional, this is crucial to keep in mind–closing sales is about more than just fee revenue, it’s also important to client retention, and it all begins with understanding the customer’s accounting systems and processes.