Banking

Why The Time Is Right For Banks To Tap Into Integrated Receivables

bank

FinTech firms are delivering technology solutions to banks that can help them maintain their customer relationships — and generate income. As it stands, many larger banks — and even mid-sized banks — tap into treasury management solutions for two reasons. DadeSystems CMO Tom Berdan told PYMNTS in an interview that the first reason is to “attract and retain corporate customers.” The second reason is that as part of generating those deposits they will hopefully receive some fee income from those customers by providing services to them. And, on the lending side, to the extent that a bank is offering both a loan and treasury management services to a corporate, they have the entire relationship with that particular customer.

While treasury management has always been a critical component of bank offerings, most treasury management solutions today are limited to lockbox processing. And the banks have done a good job standing up that solution to handle the check payments from those corporate customers. However, corporates are receiving payments through all sorts of channels. Those may include automated clearing house (ACH), wire transfers, credit cards and payments through payment portals. The electronic side of payments is growing, as it stands, with the inclusion of business-to-business (B2B) payments, up 9.4 percent to $3.6 billion per NACHA.

And as the check volume continues to decline, those electronic payments are increasing. The banks don’t have a solution today to help accommodate those corporate customers. However, Berdan says integrated receivables gives them that “additional capability” to handle any kind of payments, including the check payments — the corporate customer also receives a consolidated reporting view. The net of all that, Berdan says, is that corporations today are finding that traditional lockbox services are inadequate.

As a result, they are looking to vendors such as DadeSystems and others in the marketplace that can provide them with those integrated receivable solutions. And the corporate customer then has the ability to go to any institution because they no longer need those treasury management solutions. One of the tenets of Dade Systems, however, is it aims to partner with the bank to provide these solutions. The bank then, in turn, delivers them to their corporate customers. And, with the help of these kinds of technologies, FinTechs are helping banks keep up with the evolution of payments from checks to electronic payments.

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PYMNTS LIVE VIRTUAL PANEL: WHY SWIFT GPI IS JUST THE BEGINNING 

On Tuesday, March 31, 2020 at 9:00 AM (ET) join PYMNTS CEO Karen Webster and panelists Vincent Kilcoyne and Roland Brandli of SmartStream for an in-depth discussion on the need to use transformative digital strategies to remain relevant in today’s challenging financial landscape. The discussion will cover strategies that will allow clients to improve operational control, reduce costs, build new revenue streams, mitigate risk and comply accurately with regulation.

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