Commercial payments firm Bottomline Technologies is doubling-down on data intelligence after posting an 11 percent year-on-year increase in subscription and transaction revenues for the fourth quarter of fiscal year 2019, the company announced Thursday (Aug. 8) after market close.
Both Rob Eberle, chief executive officer and president, and Rick Booth, chief financial officer, described the results as “solid” for the firm during Thursday’s earnings call. Overall revenues increased just 2 percent year-on-year, hitting $108.2 million for the quarter, but Bottomline remained confident in growing revenues for FY 2020 thanks to new customer sign-ons that have yet to go live.
“Bottomline delivered a solid fourth-quarter performance,” said Eberle in a statement. “We had notable customer wins across our banking and business payments platforms as customers continued to choose Bottomline for innovative and highly secure business payments solutions. Our product strategy and execution are targeted to drive sustained growth for years to come.”
During Thursday’s conference call, Eberle emphasized the clarity with which Bottomline is executing on its product vision, a strategy the company noted will zero-in on data.
“There is a major transformation in today’s systems,” he said. “Systems of record will be replaced by systems of engagement and intelligence.”
For Bottomline’s Paymode-X B2B payments network, that means further investment in the platform’s Network Payment Score, a score that analyzes vendor payments characteristics to assess the risk of any given transaction. According to Eberle, it’s not necessarily the opportunity to give up checks that will encourage businesses to adopt the Paymode-X solution, which signed on 22 new corporate users during Q4. It’s the growing threat of payment fraud that is pushing Bottomline to invest in payments security and data analytics within the platform.
Further, Bottomline noted that it will expand its customer targeting efforts to include middle-market and smaller businesses to on-board to Paymode-X, which will lead to further investments in card acceptance and invoice-to-pay functionality, the firm said. The company has an existing collaboration with Visa, with the payments technology firm having announced in the quarter that its B2B Visa Connect solution added Bottomline as a partner ahead of the solution’s launch in June.
Although the firm said an “insignificant” portion of the company’s revenues come from virtual card today, Bottomline is expecting that volume to swell as v-card adoption arises and as integration capabilities of Paymode-X increase, too.
Digital Banking IQ
Data intelligence will also be key for Bottomline as it promotes growth of its Digital Banking IQ (DBIQ) solution.
As the company launches new collaborations with financial institutions, it also recently announced enhancements to its DBIQ offering with the Intelligent Engagement suite, connecting financial institutions with artificial intelligence and machine learning technologies, as well as an open banking API, to promote holistic services delivered to corporate clients, and a stronger ability for bank users to obtain a holistic view of those customers.
Eberle noted that the addition of three partner banks during the quarter — including a large, multinational FI, a middle-market player, and a regional commercial bank — represents the ability of the solution to address a range of needs of traditional banks of varying sizes to strengthen and digitize their corporate financial services offerings.
Amid its focus on engagement and intelligence, Bottomline said it would continue to invest in machine learning and artificial intelligence to further strengthen its ability to provide financial institutions with customer insights and promote intelligent engagements.
“We’re making investments across all of our platforms in intelligence, personalization and analytics,” said Eberle, who added that the U.K.’s and Europe’s migration toward open banking is a significant enough opportunity to override the economic and FX risks resulting from Brexit and the current depreciation of the pound. (Bottomline revised its guidance as a result of the current weakness of the pound sterling.)
“What’s going on with payments in the U.K. and open banking, and in Europe with PSD2, the changes in payments standards — it’s a fabulous time to be in business,” he noted.