Corporate banking clients want more support from their banks in fast-tracking their digitization efforts. In the latest Next-Gen Commercial Banking Tracker, U.S. Bank’s Rich Erario discusses how financial institutions (FIs) can better serve these clients’ digital demands, especially in the growing need for embedded finance.
The commercial banking industry has taken great strides since 2020 to offer a wider and more advanced suite of digital services, but its clients have grown more demanding in parallel.
Continuous innovation is more critical than ever in meeting the needs of banking customers. Businesses want more effective and flexible digital tools for payments, loans and onboarding, among other areas, and they expect these solutions to be transparent, accessible and seamlessly integrated into their banking platforms.
“Digital capabilities for business are driving real innovation and progress in the larger corporate space,” Rich Erario, executive vice president and head of global treasury management at U.S. Bank, said in a PYMNTS interview. “Today, we’re seeing continued evolution of digital capabilities as commercial customers often ask for more visibility into the product onboarding process, faster time to product fulfillment and servicing, easier understanding of products available for specific business needs and a way to cut down on the amount of paper needed in the process.”
The Challenge of Getting Digital Right
Meeting these demands has become more challenging over time. According to Erario, however, U.S. Bank’s corporate payments and treasury solutions aim to deliver five key elements to the customer experience: transparency, collaboration, speed, connectivity and accessibility.
Transparency means giving the client a centralized platform and other tools for monitoring their banking activities, which also helps facilitate collaboration and communication with their bankers whenever needed. Speed requires not only a centralized platform but also effective onboarding and streamlining of digital processes. Accessibility means all customers can use these solutions.
These factors can “reduc[e] the time it takes for some tasks from four hours to as little as 15 minutes,” Erario said.
Clients need and expect help in implementing such solutions, however.
“They seek more support from their banking partners in automating both business-to-consumer (B2C) and business-to-business (B2B) payment processes end to end,” he said. “To be successful, traditional commercial banks need to have an ambitious roadmap to deliver experiences for their customers. Banks are in the best position to deliver something we call, at U.S. Bank, ‘human + digital.’”
This means having the technology as well as the people who know how to match the available tools to the needs of their clients.
“We’re focused on how our people make a difference,” he said. “Add to that our commitment to helping companies make better data-driven decisions using digital payments capabilities, and the combination of human + digital becomes a powerful response to market competition.”
High-Demand Digital Tools
High-demand tools in B2C include solutions that give consumers a range of embedded digital payment options, such as “push-to-card” and Zelle, that instantly pay and notify the payee. Alternatively, corporate clients in the B2B space have a range of goals, from cost reduction to fraud protection, and want to streamline accounts payable (AP) processes and related accounting. U.S. Bank aims to meet these needs with its AP Optimizer platform, which Erario said, “streamlines invoice management workflows and helps create more efficient reconciliation through automation.” Corporate banking clients can significantly reduce human input and labor costs by adopting these solutions for back-end tasks that can be automated.
Application programming interfaces (APIs) are another area in which banks need to take the lead with their clients, Erario explained. It is up to banks to educate businesses on what API tools and solutions exist and how they can deliver value and efficiency. Banks can offer APIs through their main online banking platform and through integration into customers’ own systems, he added.
APIs’ uses range from real-time payments to spend reduction to robust artificial intelligence (AI) data-mining functions. Erario said that APIs power a marketplace for U.S. Bank’s car dealership clients, enabling instant confirmation of payments that let customers immediately leave with their new vehicles, for example. U.S. Bank’s Account Validation API, meanwhile, helps secure insurance claims, and its Voyager fleet management cards employ APIs to improve data gathering, cost control and monitoring capabilities in transportation companies.
Businesses must keep pace with digital innovations in financial services to stay competitive, and the increasingly complex landscape means they will depend more heavily on their financial institution (FI) partners to guide them. Commercial banks that deliver on these digital needs, in turn, will improve customer retention and increase their margins, which is especially critical in these less certain economic times.