Check out this Bank Systems and Technology article written by Lawrence Buettner!
The brave new world of electronic B2B payments is not shaping up to be a utopia. Just because check payments are slowly going away, does not mean the same applies to payments issues. In fact, the rise and mass adoption of electronic payments creates new problems for businesses—read more
By Marcus Sanford
Interactive Marketing Specialist
Business to business payments are now increasingly being made by methods other than paper check. In fact, a 2013 Fed study indicates business check payments declined 9.2% from 2009-2012. This represents a sea change in the payment mix, as B2B receivables, unlike consumer payments, have traditionally been resistant to this industry trend. Our chart below illustrates how usage of paper checks for both consumer and business payments are declining.
The shift to a broader mix of payment types, especially electronic methods, is on. In 2013, a survey by the Remittance Coalition found that 90 percent of respondents wanted to accept more e-payments and less paper checks. However, the shift to electronic methods has caused new headaches for processors.
Problems that were previously considered "solved" by traditional receivables systems such as matching a payment to a separate invoice have returned to the forefront, with electronic payments being sent by ACH, Wire, or other means without payment information, or that information coming into a business separately by web portal, email or even that old standby, the fax. The result can be even more exceptions than were occurring with paper payments.
Fortunately, there is a solution at hand to managing the proliferation of payment types and eliminating exceptions when dealing with e-payments - integrated receivables. Integrated receivables technology can assist with matching payments to separate payment information, provide visibility into receivables from all channels in one combined view, and help organizations develop new insights into their payments and cash flow.
To learn more, download our recent white paper: How an Integrated Receivables Solution Eliminates the Barriers to Electronic Payments.
By Jason Olson
At our 25th Annual Customer Conference in April, we hosted Bob Meara, senior analyst at Celent’s Banking Group. An expert in the remote deposit capture (RDC) space, we’ve worked with Bob for many years and were humbled to recently receive the XCelent Service Award in the 2013 ABCD Vendor View report (thanks, Bob!). Having followed the technology since its inception and launching a series of Check 21 Act payments solutions prior to joining Celent, Bob is truly seen as an industry leader in both the RDC space and the broader banking technology industry.
In his session titled “Distributed Capture Update: A Medley of Insights,” Bob addressed the state of the RDC and teller capture industry, as well as what’s to come for the solution, which celebrates its tenth anniversary this year. We’re sharing below our favorite takeaways from Bob’s session:
Teller Capture Adoption is on the rise, again. While branch capture adoption virtually came to a halt in 2010, the past two years have seen a significant increase in teller capture usage, particularly in banks with asset size upwards of $50 billion. As brick and mortar branches are on the decline, branch transformation initiatives will drive teller capture adoption moving forward.
Mobile RDC (mRDC) is heating up for small and medium businesses (SMBs). While only 11 percent of respondents to Celent’s financial institution survey offer a mobile RDC option for commercial clients, Celent projects this is the next wave of adoption, focusing on small banks who might re-think commercial mRDC for SMB customers.
Deposit risk will increase as RDC continues to gain traction. And not just for mRDC. Bob noted vigilance against fraud is necessary across the enterprise. Notably, risk and compliance challenges have become less overwhelming for banks. Since 2012, banks have shifted their SMB customer priorities away from improving risk management and regulatory compliance, making way for what really matters – increasing client adoption for fee revenue and deposit growth. Bob recently published a risk-related blog post for Celent based on a session he attended at WAUSAU’s Customer Conference.
Pricing is polarizing for mRDC and risk capabilities. A major barrier for mRDC and risk monitoring adoption is cost. More than half of survey respondents (51 percent) would expect a free mRDC solution in conjunction with their existing RDC solution to maximize client adoption. Steep costs also prevent banks from adding risk management solutions. While many banks have expressed interested in interbank RDC risk management, Celent suspects banks’ assumptions around pricing limit appeal.
We’re happy to see Bob’s projections for RDC align closely with WAUSAU’s views of the space. Earlier this year, I contributed an article with my predictions for RDC in RemoteDepositCapture.com’s special report that marked the 10 year anniversary of the Check 21 Act. In it, I highlighted the future of mRDC adoption, the opportunity for small businesses and identified price as a barrier to adoption.
By Marcus Sanford
Interactive Marketing Specialist
Integrated Receivables remains an area of top interest for banks and their customers. Corporations are continuing to look into deploying integrated receivables as a way to improve their payments processes - Aite Group finds that 60 percent are unhappy with their current systems. It's no wonder, then, that 43 percent of banks surveyed by CEB TowerGroup in 2013 saw competitive advantage as the top value of investing in an integrated receivables hub.
The key question for financial institutions, then is how to get there. Deploying integrated receivables in an effective manner is vital to realize this largely untapped revenue opportunity. With the need to get to market quickly but IT resources already under tremendous strain, what route makes the most sense?
Download our Treasury Strategies report excerpt to examine the business case for integrated receivables - and then talk to us to discuss the full report in depth along with information on flexible new deployment options - including full outsourcing, co-sourced outsourcing, and cloud (SaaS) models - that could make deploying integrated receivables more feasible for many banks.
We are anticipating a great event for our 25th Annual WAUSAU Customer Conference, with presenters and panelists from TD Bank, Capital One, BNY Mellon, Verizon, Huntington Bank, Northwestern Mutual, Comerica, Central Technology Services, Charles Schwab and more. Leading analysts and experts from Celent, The Federal Reserve, CEB TowerGroup and Treasury Strategies will share their insights. Read on for details on our exciting general sessions!
The Future of Commercial Payments
Hear what Andy Schmidt, Research Director at CEB TowerGroup and author of the new report, “Top 10 Trends in Commercial Banking,” has to say about how the economic outlook, increasingly stringent regulatory environment, evolution of customer needs, expansion of digital channels, and the threat of increased competition are all forcing commercial payments to evolve for banks and corporations.
Driving Results in Treasury: Emerging Trends & Their Operational Implications
A panel of leading experts and practitioners will present and discuss the latest treasury trends impacting leading corporations and banks. Learn the ways your business can respond and create an operational advantage in this interactive panel session moderated by Dave Robertson, Partner, Treasury Strategies, Inc. and featuring clients like Verizon, Northwestern Mutual, TD Bank, Huntington, Capital One, Comerica and Bank of New York Mellon.
Because Results Matter: An Update from WAUSAU’s Senior Executive Team
As the financial industry has advanced over the years, so has WAUSAU and our solutions. Once a paper check processing company, WAUSAU has evolved into a digital payments partner focused on integrating receivables, eliminating paper and accelerating deposits and payments. We’re entering 2014 with a new message, refreshed look and unwavering mission to be a catalyst for our clients’ success as well as our own. Hear from our CEO Gary Cawthorne and our senior executive team on how we can partner for strong results in 2014 and beyond. Why? Because results really do matter!
Charles Schwab’s Enterprise Deposit Automation: One Capture Platform for All Deposit Channels
Join Kristin Roney, Vice President at Charles Schwab to hear about the launch of their unique, customized solution which provides them with one platform to capture deposits regardless of how customers choose to make them, whether via mobile phone, in-person or by mail. The use of this technology will position Schwab to further automate enterprise deposit processing for millions of customers, reduce operations costs and maintain or exceed the high level of quality client service that the company is already known for.
“The WAUSAU Talk” featuring Cheryl Kendrick, Central Technology Services
Join WAUSAU hosts Dawn Gurskey, Joe Pitzo, Jodi Garvin and Trudy Lotter for their first (and maybe only) episode of “The WAUSAU Talk”, featuring customer and advisory council member, Cheryl Kendrick, Senior Vice President, Deposit Operations at Central Technology Services (CTS). Cheryl has been an avid supporter of WAUSAU since 1999 and is known for her honest views, thoughtful outlook and candid sense of humor that is guaranteed to keep you entertained throughout this amusing and lively interview. We’ll get Cheryl’s perspective on CTS’ longstanding relationship with WAUSAU over the past 15 years.
View our full sessions lineup on the Customer Conference site!
By Lawrence Buettner
SVP Product Innovation
Treasury 3.0 represents a challenge for both banks and practitioners. David Waltz’s article, Treasury 3.0 from a Practitioner's Perspective: Opportunities and Challenges, laid out the challenges for corporate practitioners. The challenges faced by banks are no less daunting. Treasury Strategies appropriately projects, since we are just entering the 3.0 phase, characterized as “payment and liquidity solutions offered by banks, as opposed to specific product sets put together by companies”, it will take time for the results to be realized.
In their article Treasury 3.0: Challenges and Solutions, Treasury Strategies has articulated well the maturation of bank provided treasury services over the last 40+ years. They ably point out that much progress has been made during this period. Efficiency has improved tremendously and yet the sophistication of treasury services, by their 3.0 definition and most other yardsticks, remains rather rudimentary.
The challenge for most banks is how to remain relevant to their customers in providing state-of-art treasury services as the pace of innovation quickens by the largest banks and other non-bank providers, namely ERP and other non-bank treasury services providers.
Banks are faced with a number of challenges in meeting the needs of their corporate customers.
Regulatory Burden- it has been well chronicled the amount of regulatory burden imposed on banks as a result of Dodd-Frank and other legislated changes as the result of the fallout of the “great recession”. These burdens are being felt by banks in their cost for compliance. Compliance is diverting funding from the development of new products into the remediation of existing platforms, products and services to address regulatory mandates. The amount of discretionary R&D funding available for new customer facing products is thus scarce, in an industry where R&D expenditures are already historically low[i].
Historical Impediments- the development of Treasury 2.0 bank cash management products was a dis-jointed, fast-paced process in reaction to competitive pressures. Products were invented and developed utilizing disparate technologies and architectures. Today’s larger-bank architectures are a collection of single purpose product platforms bound together by extensive spaghetti-code interfaces to deliver services to customers. The silo nature of the systems makes it difficult for banks to effectively rise to the Treasury 3.0 challenge for combining payment and liquidity products.
Industry Consolidation- the U.S. bank industry consolidation has created unintended consequences well beyond Too Big To Fail (TBTF). The scale achieved by the largest bank treasury service providers has impacted the rest of the industry’s ability to justify the costs to remain competitive.
Industry consolidation has also created new larger players, who until recently were viewed as smaller regional banks, who must now re-tool their back offices to address scale and product feature gap issues, if they want to be perceived as viable treasury services providers.
Clearly, no top-50 U.S. bank can afford the time, cost and risk to rip and replace multiple systems to facilitate the Treasury 3.0 end-state. Without a thoughtful strategy, all banks stand to be further dis-intermediated by non-bank providers and be left with true commodity products and prices. Lacking the scale of the largest treasury services banks, smaller banks are going to be faced with the hard questions raised by Treasury Strategies: “the life cycle decision, the business driver decision, and the value proposition decision” as they struggle to fund products to remain competitive.
Then how do the largest banks make progress and the smaller players afford to remain competitive? To compete, all banks need to develop products with a three dimensional view:
- Aggregation – avoid the need for replacing product factories through aggregation of data into central data stores; thus reducing the integration burden.
- Automation – customer facing products need to be more than web accessed “list-reports” but be enabled by rules engines and workflow that easily meld into the back office of clients.
- Acceleration – no longer defined as speed of transaction processing but the ability to harness the underlying data and provide constructive insight so that customers can better manage their business.
If technology were the only hurdle faced by banks, the task would be manageable for most. The fundamental hurdle for all banks may be cultural organization inertia. The silo bank product factories used for delivery of treasury services also restricts line-of-business and product managers thinking across the organization to develop the products envisioned in the “3.0” world. A new breed of thought-leaders, who have the ability to become span breakers, are required to convince executives to make the required investments as the industry goes through transformation.
To create momentum toward Treasury 3.0 product delivery, banks will also need to look externally to form new partnerships with thought-leaders and providers who understand that tomorrow’s products are no longer solely defined by “feeds and speeds” but integration and innovation. The payment and liquidity product combinations envisioned in Treasury 3.0, in which banks are the integrator, not the company, will stretch the boundaries of current bank services into the back office of the corporate customer. This is an area that banks have dealt only on the periphery.
In the treasury services industries with an annual spend of $1 trillion, non-bank providers, unburdened by compliance and regulation; stand to reap the largest rewards in the Treasury 3.0 world. Banks need to figure out how to develop thought-leadership, partnerships and allocate the resources necessary for change.
By Tracy Dalton
Senior Product Manager
Traditional payment processing is overhead-intensive, with high fixed costs for space, processing hardware and software, and staffing. Remote Lockbox provides an alternative solution that increases flexibility and provides unique advantages.
Take the example of First Commonwealth, a $6 billion bank based in Pennsylvania. By deploying Remote Lockbox, the financial institution was able to grow its lockbox business 350% while reducing transaction costs despite supporting over four times as many lockboxes as they had previously.
Our new infographic clearly illustrates how Remote Lockbox helps financial institutions and other organizations overcome the limitations of traditional lockbox payment processing with benefits such as:
- Converting fixed overhead costs of hardware, software and space requirements to variable costs, scaling with processing needs
- Ability to expand geographic reach and branch out into new areas
- Easily enter new profitable vertical markets such as property management or medical payments
Download our complimentary infographic to visualize how Remote Lockbox compares to traditional lockbox.
By Jason Olson
RDC Product Manager
What is the best way to price, sell, or implement RDC services? How are you enrolling your customers to effectively manage the risks associated with RDC?
In our latest white paper, Happy State Bank & Trust Co., Susquehanna Bank, and American Chartered Bank answer these questions with their own tailored, winning strategies to approaching and implementing mobile and merchant RDC services that are helping them lead the way and achieve tremendous results.
Complete with detailed, perspective–filled interviews from each financial institution, the white paper demonstrates that successful RDC services don’t always follow a one-size-fits-all roadmap. Despite using very different strategies, each organization mentioned above has achieved success with RDC:
Happy State Bank has been successfully offering RDC for five years and continues to grow its number of users.
American Chartered Bank’s mobile users surpassed the number of desktop users that they have and their deposit volume is split evenly between consumers and small businesses mobile users.
Susquehanna Bank surpassed their first-year offering projection in two months with 6,000 mobile RDC users.
The key to RDC leadership is for financial institutions to aggressively implement the strategies that they believe best meets the needs of their customers, as well as their bank.
Download our complimentary white paper, One Size Doesn’t Fit All for Remote Deposit Capture Success to help develop a winning RDC strategy that works for you!
Business-to-Business payments are complex. The vast majority of B2B payments are still check-based, and corporate receivables management has traditionally been a time-consuming and labor-intensive process.
With payments coming in to many organizations through agents, remote offices and other sources, keeping track of it all has become a difficult task.
Faced with these challenges, most organizations have chosen to outsource their lockbox to a bank or other provider. Even with this arrangement, however, keying fees, matching invoices to payments and handling exceptions and deductions still end up costing large companies hundreds of thousands of dollars a year - or more.
Companies themselves acknowledge these drawbacks - a recent Aite Group survey reported that 60 percent of organizations were not fully satisfied with their receivables processes.
For many businesses, deploying an integrated receivables hub to automate payments processing can be the solution. By capturing payments from multiple channels and locations, automating exceptions handling and consolidating outputs, many organizations have made clear gains with these systems.
In fact, corporations implementing an integrated receivables hub have reduced their in-house labor costs associated with payments processing up to 75 percent and virtually eliminated lockbox fees.
Download our new white paper and learn how integrated receivables can help your organization speed receivables and improve business efficiency.
By Joe Pitzo
Vice President, Paperless Enterprise Solutions
Treasury departments today are facing heavier compliance duties than ever before to ensure all documents are signed and accounted for.
This can be challenging for financial institutions, especially when completing large, multi-service client transactions. Purchasing a suite of treasury services can generate over 100 pieces of paper in just signature agreements alone!
When large amounts of paper are involved in the on-boarding process, the opportunity for duplicate data entry or misplaced/misfiled documents is great.
Knowing this, most people would assume it would make sense to spend even more time than they already do, focused on the paperwork to ensure compliance.
But what if all of this time and vigilance wasn’t necessary? What if you could actually spend less time chasing down pieces of paper and enjoy an easier, more accurate audit?
Find out how by reading my article on Bank Systems and Technology’s website, Paperless Treasury Management Helps Ensure Compliance.
After reading the article, take a look at how going paperless in Treasury can remove the risk of error from manual on-boarding.