B2B Payments

Addressing The FinServ Needs Businesses Didn’t Even Know They Had

Corporates may have been forced to accept what they were offered from traditional financial institutions (FIs) in the past, but the surge of FinTech players disrupting the market and challenging banking firms to do better has opened up new doors for CFOs and treasurers, says Flavia Alzetta.

Alzetta is the new CEO of Contis, a FinTech that provides banking and payments services across the U.K. and Europe. The company is positioned as a partner to traditional banks, but Contis is also preparing the launch of a direct-to-corporate solution, Freedom for Business. The offering reflects the dynamic nature of the corporate financial services space today, a mesh of both competition and collaboration between banks and FinTechs.

“Corporate banking really is a booming sector, as I see it,” Alzetta recently told PYMNTS. “Sometimes, what I think happens to all of us as consumers is that you have a need, but because you don’t see who can actually meet your requirements; you compromise and look for other products and solutions. I think the same thing is happening with corporations. They would like to do certain things, but because no one seems to provide a solution, they try to work around it.”

Newcomers in the market, like Contis, are addressing those gaps and presenting new opportunities for business customers, the CEO said.

According to Alzetta, there are a few key demands corporates have from their financial service providers. Need for cross-border solutions, especially across Europe, is a big one, she said.

“The country structure today is becoming less relevant, and there is more business that is done across borders,” said Flavia Alzetta. “Corporates have the expectation to be able to bank across borders as well.”

Corporate treasurers and CFOs are also looking to take greater control of transacting and banking from their desktops, leading them to seek out solutions that support desktop and mobile access to FI services. For businesses that operate with employees across borders, or employees that are transient, streamlined and efficient payroll solutions are also in high demand.

In a way, corporates’ demand for banking services takes a cue from the consumer world.

“Today we are dealing with businesses and consumers that have different and higher expectations [from their banks] than they did in the past,” the executive noted. “Consumers today have a mindset of wanting to bank instantly, easily and with solutions at [their] fingertips. As a CFO, I would expect to be able to manage banking and payment activities in the same way and with the same characteristics that dominate the consumer environment.”

But in another way, companies who have, for so long, accepted services from traditional banks that fall short may have needs that even they don’t know exist.

Faster payments might be one of those areas, Alzetta said.

“In the corporate payments space, there has been an acceptance that it takes days to move money from on account to another to make a payment,” she noted. “And that is not necessary anymore. Therefore, corporates look not only at faster payments, but also at economic faster payments. Faster payments is perceived by the industry as a value-add, and it’s therefore priced higher than other payments. What we’re looking at is having companies be able to move money almost instantly, and to do so economically.”

At the heart of this lapse of inadequate services to corporates is banks’ ongoing reliance on legacy infrastructure, said Alzetta.

“Traditional banks have been operating over a number of decades limited by the fact that they rely on legacy systems, and those legacy systems constrain what their offering is and is going to be,” the CEO stated. Alternative players can collaborate with traditional FIs to enhance their offerings both to consumers and corporates, but they can also work with those corporates directly to address their needs and shed light on how they might be able to improve processes.

“Our target is what we have defined as the underserved business space,” she said. “It’s where you have companies that, today, don’t get the right services or don’t get what they want. In the banking industry, there is an opportunity to provide solutions that traditional banks don’t provide.”

But while corporates may have similar demands and expectations as consumers for their financial services, they also lag a bit in adopting newer technologies.

“There seems to be a lower propensity to change,” the CEO said of corporates’ adoption of FinTech. “But I think there is much more at stake when you think about businesses, and therefore they’re more cautious about adopting new technology solutions — unless it’s proven that it works.

“One of the big challenges of alternative banks,” Alzetta continued, “is their ability to provide a reliable service and platforms. That is where the banks today still offer a viable solution, because of their reliability. But that, unfortunately, comes with some inflexibility. Players that are able to provide flexibility, high customization of services and at the same time provide reliability will abruptly emerge as winners in this space.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.