Financial institutions (FIs) are rising to the challenges of business clients seeking and doing more business in overseas markets, requiring a rethink — and in many cases, an upgrade, with services like automated account validation and digital lockboxes to address security issues.
New data finds that FIs serving cross-border payments customers and large enterprises are leading in providing more digital solutions than those serving middle-market companies and small businesses, although the trend is advancing rapidly to firms of all sizes.
For Meeting The Challenge Of Payments Modernization: Understanding Customer Needs, a PYMNTS and FIS collaboration, we surveyed over 300 executives leading treasury services or wholesale banking at FIs serving B2B clients in small businesses (under $20 million in annual revenues), middle-market firms ($20 million to $1 billion in annual revenues), enterprises with over $1 billion in annual revenues, and corporates making B2B cross-border payments.
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With the increase in cross-border commerce, more FIs are offering solutions to reduce frictions for cross-border payments, with account validation and digital lockboxes leading methods.
Per the study, “FIs serving cross-border payments customers are most likely to offer account validation, at 93%. FIs serving large enterprises, on the other hand, are the most likely to offer digital lockboxes, as 95% do so. Those serving cross-border payments customers offer 7.1 digital solutions on average, and those serving large enterprises provide an average of 6.8 solutions to streamline B2B payments.”
PYMNTS research found that “at least three-quarters of FIs serving cross-border payments customers and large enterprises say their solutions are ‘very’ or extremely’ effective,” while adding that only 30% of all executives surveyed say their FI currently offers digital solutions that are “very” or “extremely” effective in addressing B2B payments frictions.
Interestingly, 80% of FIs serving cross-border payments customers and 75% serving large enterprises say their digital solutions are “very” or “extremely” effective, indicating that “large enterprises and cross-border payments customers tend to have more experience pursuing payments innovation to address B2B payments frictions.”
The appetite for new tech to improve cross-border B2B payments is healthy, given the benefits firms of all sizes reap from these innovations.
We found that 64% of all executives surveyed saying they’re “very” or “extremely” willing to bring in new tech to solve cross-border pain points. Per the study, “institutions serving cross-border payments customers and large enterprises are leading the way, as 93% of the former and 88% of the latter say they are ‘very’ or ‘extremely’ willing to adopt new technologies to facilitate B2B payments consumerization.”
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