T&E Finds Opportunity In API-First Approach

While many businesses large and small continue to rely on the legacy method of expense management — that is, requiring employees to front the bill, manually fill out expense reports, and submit spreadsheets for paper check reimbursements in the mail — FinTech innovation has opened the door for significant improvements in this arena.

Those opportunities have grown, too, as corporates embrace digitization, the cloud and electronic payments. According to Yash Madhusudan, chief executive officer of India-based expense management firm Fyle, there have been several waves of expense management innovation resulting in new standards for the industry.

Among the most recent is the emergence of remote deposit capture, enabling employees to automatically capture receipt data by taking a picture of the document with their mobile device. What was once an innovative advancement is now a standard requirement for expense management solutions and the companies they service.

In a recent interview with PYMNTS, Madhusudan, whose firm recently announced $4.5 million in funding led by U.S.-based Steadview Capital, mused on the next phase of expense management innovation.

It’s all about data, he explained.

“I believe we are in an era I like call the ‘post-mobile’ era,” he said. “Applications that utilize data in a contextual manner to automate workflows are going to create the standard for this era.”

In the expense management realm, that means deploying functionality that can integrate across platforms and take an API-first strategy to product development. This kind of integration and seamless exchange of data between platforms is key to developing products that operate seamlessly and without manual intervention. This can be demonstrated in the ability for an expense management solution to integrate into existing financial platforms like accounting portals, for instance, or wielding expense management data for another third-party financial analytics and forecasting app.

Commercial Cards’ Role in Data Integration

While data integration and APIs support seamless functionality and sophisticated analytics of expense and spend management, there’s another impact that an API-first approach can have on how corporates embrace commercial card products.

According to Madhusudan, often times the differentiating factor between businesses that embrace p-card products and those that don’t is trust. Businesses with relatively fewer employees may feel more comfortable dishing out a company card because employees and management can have a deeper relationship with each other.

But technology can augment that trust even for larger organizations. Taking an API-first approach offers the opportunity for expense management companies to collaborate and integrate directly with card issuers, for example, and not only develop ways for businesses to issue physical and virtual cards for employee spend, but also manage that spend on a digital portal.

That’s the strategy Fyle is taking as it looks to enable spend and policy controls, fraud detection and spend analysis at the point of transaction — not retrospectively after spend already occurs. That functionality can only occur when an expense platform is able to integrate card data directly.

With this approach, whether companies issue physical cards, virtual cards or a mixture of the two becomes less of a differentiator in expense management than whether or not those card products can deliver valuable data — and whether an expense management solution can make use of that information through a commercial card management solution. According to Madhusudan, this is what will support commercial card adoption in the enterprise in the context of T&E.

“It’s a very interesting space aligned with how companies manage spend,” he said. “We’re seeing different version of how corporate cards, when they’re managed well, multiple people win.”

Mixing Data With Human Behavior

Spend data can introduce new opportunities in expense management, particularly when analytics tools like artificial intelligence (AI) enter the fold. Madhusudan pointed to fraud, anomaly and out-of-policy detection as important areas in which AI can be useful.

Data integrations can also be deployed to enrich the expense management experience for the employee themselves. Madhusudan said Fyle is exploring integrations with a range of enterprise apps already deployed, including employees’ digital calendars and email accounts. Smartphones and email, the two pillars of booking and managing a business trip, are troves of important information that can augment the holistic experience of the business trip, from booking to payment and expense analysis.

What’s important about this trajectory of expense management is its reliance not only on the technology of data integration and analysis, but also on the user experience.

Integrations that use travel booking data can support an employee’s seamless management of a business trip. Data analytics technologies can alert an employee that the purchase they are about to make is out of company policy. A single-use virtual card can mitigate the risk of fraud without forcing an employee to change their spend behavior.

It is imperative that expense management technology — and all enterprise tools, for that matter — don’t just focus on functionality, but on adoption, said Madhusudan.

“Unless that technology is adopted really quickly, it never results in a positive ROI,” he said. “We have to build in a manner that is extremely empathetic to users, specific to users in the right context. The process should not make it more difficult than it already is.”