B2B Payments

Embracing The Cloud With FIs’ Corporate Clientele On The Line

Banks have always turned to third-party FinTechs to integrate add-on services for their customers. As interest in corporate financial services heats up, financial institutions (FIs) are increasingly turning to these partners to enhance their B2B offerings, too. Like their corporate customers, FIs are beginning to trust the cloud to deploy and maintain some of these solutions.

That’s the trend that led Temenos to reintroduce its Payments Hub solution, first launched in 2013, into the cloud via the Microsoft Azure platform. Announced last week, Temenos’ launch of its Payments Hub in the cloud aims to provide FIs with a core banking and payment system flexible enough to meet modern-day needs of those institutions.

“We’re starting to see momentum in the market as banks recognize the benefits that the cloud has to offer, and how those outweigh the perceived risk that comes with implementing new technology, especially around those of replacing aging payments systems,” explained Darryl Proctor, product director, Payments, at Temenos.

The cloud has become an increasingly important risk management tool for banks just as it has for companies themselves, the executive noted, thanks to its scalability and affordability. Plus, the cloud lets FIs deploy solutions more quickly, “which will enable them to compete with the FinTechs that are disrupting the payments space with sleek and agile technology,” said Darryl Proctor.

One of the largest advantages of the cloud for financial institutions is the cost, he said.

“The cloud allows for lower total cost of ownership, which in turn allows banks to invest that money to add value and expand their products,” the executive said. “When paired with the scalability and quick time to market of the cloud, banks are able to take the products they just invested in and launch them quickly, enabling them to respond to changing market needs and build momentum as they continue to find new ways to add value and enhance the customer experience.”

Historically, quick deployment and frequent upgrades of bank services has been key to keeping consumers happy. But increasingly, this is important for corporate clients, too.

Temenos recently released research with Ovum, the “2017 Transaction Banking Survey: Challenges & Imperatives of Real-Time Payment and Liquidity,” that found 80 percent of corporate treasurers are exploring their options and considering switching banking providers if it means they’ll gain access to better, value-added services. In their survey of 100 corporate treasurers and 100 corporate bankers, Temenos and Ovum also found that most professionals view real-time payments as an important service from their bank, while virtual accounts are also high on their list of priorities.

“The struggle for banks is how to meet that demand,” explained Proctor. “How do you improve risk management? Improve visibility into the actual status of accounts? Properly manage funds that are in motion?”

Financial institutions that aren’t taking full advantage of the cloud are likely to find themselves in a position in which they are unable to quickly meet their corporates’ needs.

“The problem with in-house and legacy systems is that they were not built around the modern ISO 20022 standards, nor were they built to deal with the likes of instant payments and the resultant and obvious increase in volumes from digitization,” Proctor said, adding that banks need to deploy cloud solutions so that they can easily update, upgrade and “react to market demands.”

Keeping in mind that many organizations and their finance teams will no longer accept sub-par services from their financial institution, banks should take serious note of their ability to keep up with corporate demands. According to Proctor, payments technologies, especially in the era of faster payments, are critical to staying competitive.

“Our research has shown that four out of five corporate treasurers are considering changing banks in order to find better services,” said Proctor. “Unless a bank is interested in losing 80 percent of their corporate clientele, payments technology is absolutely vital.”

“Moreover,” he continued, “the key to retention of clients lies within the bank’s ability to service them with the latest technology and offer solutions tailored to their market.”

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