Two-Thirds of Financial Institutions Recognize Need for B2B Payment Solutions

Digital Business Banking

Financial institutions (FIs) seeking to engage and retain corporate clients are exploring how they can solve clients’ B2B payments frictions by building their own solutions — with varying results.

“The New User Experience,” a PYMNTS and FIS collaboration based on a survey of 311 executives leading FIs’ managing assets in excess of $500 million, found that although two-thirds of FIs said digital payments solutions are “very” or “extremely” important in addressing clients’ B2B payments frictions, only three out of 10 said their current solutions are “very” or “extremely” effective in reducing B2B payments frictions for clients.

Get the report: The New User Experience

Still, most FIs aren’t not planning to give up on improving. PYMNTS’ survey found that two-thirds are “very” or “extremely” willing to adopt new technologies to facilitate the consumerization of B2B payments.

Benefitting From Payments Modernization

As digitization makes B2B payments more like retail payments, the user experience of both the buyer and the seller improves. It also brings operational efficiency, harmonizes processes and takes the pain out of payments for both parties.

“Let’s focus on running our business, strategic initiatives and growing things, versus chasing fires, payment errors, routing, reconciliation errors, etc.,” Dave Owen, vice president and head of retail solutions at FIS, told PYMNTS in an interview.

Read more: Consumerized Digital Business Payments Enrich the Customer Experience

Although consumers have become used to making payments online in more secure, faster ways, many of the companies they patronize have not enjoyed the same privileges. B2B payment methods frequently are riddled with inefficiencies that can reduce the speed of businesses’ payments processing times and supply chain functions.

Tapping Innovation to Improve Digital Solutions

The consumerization of B2B payments requires bold innovation on the part of FIs, which not only bear the brunt of corporate customers’ dissatisfaction with poor payments experiences but also stand to benefit from payments modernization.

While the majority of FIs are seeking ways to alleviate B2B payments frictions, some are hindered by a lack of human resources or even simple risk avoidance.

In fact, PYMNTS’ survey found that those are the two main roadblocks to digital innovation, with 22% of FIs saying their lack of the necessary human resources to implement innovations is the most hindering factor keeping them from adopting digital B2B payments solutions, and another 22% saying the same of their tendency to avoid risks involved in adopting new technologies.

FIs unable or disinclined to chance innovation may face the potential loss of corporate clients who cannot afford to wait for better customer experiences — and who may look elsewhere instead.

Since FIs want to provide better digital payment options for their clients, it is not surprising that most are tapping innovation to improve the digital solutions they offer their clients.