In The Debate On Data Vs Money Moving, Data Comes Out On Top

Ten years ago, moving money was critical, now it is table stakes. Data is the key to providing global corporations with the insights they need to make crucial, real time decisions in fragile markets. Kevin Phalen, Managing Director, Head of Global Card and Comprehensive Payables at Bank of America Merrill Lynch argues that while anyone can “move money”, real value comes from providing data that’s intelligence enough to influence decision making on the local level.

KW: Let’s talk a little bit about enterprise payments. I’d like to zero in on a particular topic – data. Many of the conversations I’ve had recently surround the differences and similarities between retail and commercial payments is about data. With so many different layers of data that have to be considered in order for a commercial payment to be made. What are your thoughts on innovating in this space, given all the differences between the two?

KP: It’s a great question. Given the space we’re talking about, data is a critical component. It helps them to make decisions, whether it is vendor information or supplier relationships it’s critical for them to make future decisions as they move forward. When you consider the real time nature of the data, our customers need to make real time decisions with this data. We collectively need to make sure that we provide this in a way that is meaningful for these corporations. When you’re picking data from around the world associated with payments, it does require a need for thinking about it from an innovation perspective as well as other factors, like regulatory requirements, and how that data will eventually be used. I don’t think it’s an obstacle or a hindrance to innovation but I do think it’s a core component of how one approaches innovation. If you’re able to get an understanding on how to present and inform with this data, then I think it gives people a step up in the innovation perspective.

KW: But how do you do that and scale when there’s so much customized input that’s required by country and/or by supplier?

KP: Ultimately, scalability is critical. To your point, we’ve got tens of thousands of clients doing business with us from around the globe so we need to have scalable solutions. I think if you look at collecting information, you’ve got to be able to create an environment that allows the client access to data in order for them to extract or retain a decision based on the information you’re providing them. When we look at how we actually provide that data around the globe, our approach is to provide that information to the client in the best way possible for them whether that’s on a country or regional level. We want to give them the flexibility to extract that information and drive decisions off of that data. Ultimately we want them to look to us as the consultative partner who can give them broader insights about that data. Let’s get it to them, while at the same time providing those insights that will hopefully drive better decisions for them going forward.

KW: What do you think is the more valuable piece of that solution? Moving the money or providing the data?

KP: I would say 10 years ago it was all about how to remove friction from payments. Large banks were very good about making payments – that’s what we do all day long. So I think those are the table stakes

now are about how to manage payments around the globe effectively and efficiently. I think the data aspect of it is emerging around the world in regards to what clients are looking for from their financial institutions. What they’re going to do with the data is critical but it is equally important to consult with our clients about local nuances and regional regulations to determine what role the data will take. Part of our obligation as both the mover of the payments and the data, is to help our clients understand what the data is telling them, what it could tell them and make sure they’re getting data that will actually do things for them. 10 years ago people were concerned with how to make global payments and how do you reduce the friction, and I think we’ve done a really good job of that. To be frank, anyone can really move data so we need to make sure that we provide information that helps shape actions that are taken out of that data.

KW: I would also imagine that having a focus on data gives you the chance to consider new business models as well.

KP: It could, absolutely. In any organization that collects a lot of data on behalf of clients who are sitting in the middle of a buyer and supplier type relationship it does create the opportunity to have insights. When I think about the bank as an example where we have insights across the industry vertical, we may have insights across certain segments. So how do you take that information and bring it back to a different set of clients and say ‘here’s what we see in your vertical – how can we help you to drive a better process around the globe?’ We need to be doing that around the globe and being able to take that information up a level to others in different industry verticals about the value of some of the data that we do have.

KW: The world right now is kind of a crazy place – there are a great deal of geopolitical issues happening around the world and financial and economic issues that exist. How does that affect the business of enterprise payments as well as the things your clients need help with?

KP: Not only do our clients understand what’s happening globally and they also understand the implications. Working with financial institutions there are compliance issues associated with payments like ever changing regulations and day to day geopolitical things happening now that may impact the simplest of payments. Ultimately what we hear from our clients is that they’re looking to us to be that trusted advisor that understands what’s happening in those markets and who can get ahead of what’s happening and anticipate solutions to possible issues in those markets. Ultimately, clients are going to continue to do business regardless of what might be happening in that country or market. Part of our responsibility is to make sure that we provide alternatives solutions to address those issues at a local level.

KW: Do you have any specific examples of some of those alternatives that you’ve had to present to clients?

KP: A simple, for lack of a better word, example would be making sure that a T&E card can help customers get out of an emerging war zone – and I don’t mean to offend anyone with that wording. We are literally addressing those issues weekly with our clients. More holistically if you look at the discussions and the sanctions associated with Russia, many corporates around the world are continuing to do business in Russia. They need to make sure that they pay their suppliers, their employees, everything they need to be doing on a day to day basis. Clients understand that we have limitations on what we can do based on the requirements that the U.S government states but we also want to make sure we offer clients local solutions that may be found outside of Bank of America/Merrill Lynch. Our

goal is to be that trusted advisor to be able to give the client reasonable alternatives given what’s happening in the local markets they do business in. Even as recently this week with all of the action being taken around Ebola a lot of our clients are asking us about travel patterns. Our objective is being able to provide data back to our clients and many of the individuals deployed in many of these affected countries to give insights into what their employees are doing and, as needed, help them get back to their home countries.

KW: Innovation on the payments side is very visible. Why isn’t innovation on the enterprise payments space more visible?

KP: Quite honestly, some of the sexier or more interesting things are the most visible. When in reality, if you think about the treasury space in payments, a lot of it is the plumbing and the infrastructure to remove friction and to move data faster. We recently announced our new solution set where we look at payments and move them from a B to C perspective utilizing mobile capabilities and applying it to the B2C and even B2B space. That definitely has the “wow” factor and it pops well because you can touch it you can see it and you can interact with it. At the same time, we’re doing many of the same things in digital disbursements as in the core infrastructure, of getting that data to where it needs to be so the best decisions can be made. This might not be as top of mind or as sexy as many of the things you’d see on the consumer side but it is essential for governments or commercial clients to do their business around the globe.

KW: It’s like having a great roof on top of your home – you won’t drive up the driveway and say “Wow, that’s a great roof” but it’s pretty important to the structure of the house.

KP: Yes, we would probably rather talk about our refrigerator and our stoves but the reality is without that roof over your head, your refrigerator or stove wouldn’t work as well. That’s why it’s important to do the right thing day after day within the global payments infrastructure.

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