Building A Better Business Banking Experience Goes Beyond New Services

For decades, business banking has remained on a steady, straight path. Financial institutions (FIs) were required to provide foundational products and services, like moving and lending, to their enterprise and small business customers.

With the majority of product development resources landing on the retail side of operations, business banking was left behind. Only relatively recently have traditional banks begun to consider elevating their offerings to business clients — thanks, in large part, to competitive pressures from FinTechs.

But as a younger generation of business owners comes into force, their banking demands continue to intensify, said FISPAN Co-founder and Head of Product and Strategy Clayton Weir, who emphasized in a recent interview with PYMNTS that corporate banking is in the midst of a new age.

“At the very top level, the relationship a bank might have with a business has been unchanged for decades,” he said. “In 2021, that relationship is changing, because the nature of business is very different.”

Whether a small business has begun to expand globally and transact in multiple currencies, or a conglomerate has altered its business model to embrace a platform or marketplace approach, organizations of all sizes have developed higher expectations for the products and services their bank offers, because the way their businesses operate is now more complex. A technology-centered approach to enhancing the business banking offering will be key — yet, as Weir noted, it’s not the only ingredient in the recipe for improved banking products and an improved overall banking experience.

Embracing The API

In order to create a stronger product offering, FIs need to prioritize not just what a product can do, but also how it fits within a company’s existing environment and ecosystem of technologies. Application programming interfaces (APIs) have surfaced as a critical tool for banks to enable their solutions to interconnect within existing back offices and other platforms.

“APIs meant for sharing data or communicating with other applications allow both banks and their business clients to connect those APIs together and enable a whole different set of products,” said Weir. “But more importantly, they enable a different type of experience at the bank to more easily solve your problems as a business.”

Thanks to the openness of the API ecosystem, best practices are emerging within the financial service community over how to structure an API around functions like money movement. Other technological advancements, including the growing adoption of the ISO 20022 payments messaging standard, have the ability to add value by standardizing how information is formatted and presented within API-based data exchanges.

Collaboration with FinTechs should account for a significant portion of banks’ technology and innovation investments. Not only can traditional banks learn from a FinTech’s ability to “treat businesses as consumers,” as Weir described it, but they can also benefit from the many FinTechs that have a foundation built on APIs to promote connectivity.

Involvement in the FinTech community and the prioritization of API connectivity is only one step toward addressing the current gap that exists in the business banking landscape, however.

Zeroed-In On Experience

Though valuable, said Weir, APIs are not the end-all solution to a better banking experience. Rather, financial institutions should embrace an entire shift in how they approach the business customer. A focus on the end user’s experience can help guide that evolution.

For instance, said Weir, by prioritizing integration and value-added services, a bank may progress beyond merely moving money for a business customer, to offering artificial intelligence (AI)-powered accounts payable solution that can combat fraud by ensuring that suppliers, invoices and payments are legitimate.

In addition to having a broader range of services, banks should also prioritize a focus on the performance of these tools. Weir pointed to the example of Google downgrading websites that load slowly within search results, “because it’s a bad experience for everybody.” Banks need not only offer new solutions but must also meet corporates’ growing demand for tools that are integrated, agile and lightning-fast. After all, investment in forward-thinking technology means little if the end result is a poor user experience.

In this regard, FIs may be wise to think more like FinTechs in their journey toward contextual banking and payment experiences for the business user. With APIs and FinTech partnerships as key stepping stones on that journey, banks can emerge as leaders through deeper investment in innovation, integration and value.

“Value-added services that you would have never associated with what a bank does for business clients are going to be a part of how banks differentiate themselves and better meet their clients’ needs in the future,” Weir predicted.