Commercial Banking Gets Up Close And Digitized

The consumer eCommerce experience is having a ripple effect on any number of other arenas — including commercial banking.

The expectations for speed and convenience, and for an experience that gets tasks and transactions done in a fluid manner, need not be confined to online retail.

In an interview with PYMNTS, Jessica Cheney, vice president of product management and strategic solutions at Bottomline Technologies, said the customer experience is now critical in digital banking. By necessity, banks are moving away from a focus that, up to now, has been on providing transactionally-focused solutions.

“Its now reality that the proximity of a branch … is not central to any type of business relationship that they have with commercial entities,” Cheney told PYMNTS. “Smart banks have started to think about the impact of what consumers — as consumers — expect from their bank and how that translates to commercial banking.”

Those aforementioned consumer experiences, she said, have been modeled by digital service companies as far-flung as Venmo and Airbnb. It may not be the easiest mind shift, or technology shift, for financial institutions. Their product and service development approach has been, “If I can support X Y Z piece of functionality online then I’ve got this offering covered,” Cheney said. “The banks didn’t have to worry about how the user interacted with the application or if the application was ‘intelligent.’” Financial firms, she said, had viewed, and may still view, applications and user interfaces as being a means to an end — simply for getting information to or from corporate users or facilitating transactions.

Changing Times, Challenges and Evolution

But to paraphrase a line from an old tune, the times are changing.

Digital presence now outweighs local scale and geography. Banks must provide a platform that enables intelligent engagement, delivers a unified experience and offers rapid innovation in order to remain the first choice.

The mandate now is that banking, whether done by consumers or corporates, “needs to be able to be done in a simple and intuitive manner,” Cheney said. “However, there has to be something else that drives me to the application beyond just the basic action that I went there to do. I need the solution to be an invaluable tool to me in managing my business.”

There are, however, several complex business functionalities and workflows, involving multiple parties, tied to commercial banking. But as Cheney explained, “There are always ways to simplify the way that we’re asking users to interact with the banking solution. But the real value occurs when the application is automating routine tasks or providing data rich insights that increase the knowledge of the end user about their key business tasks or performance.”

As she noted, a lot of banks don’t take advantage of the massive amounts of data on hand that can paint a financial picture of a corporation, with specific business habits — such as how it might prefer to pay vendors, for example. Leveraging machine learning means banks can help corporate clients (with a holistic view on how they operate) make smarter day-to-day operating decisions. Actionable insights, intimacy and intuition brought to commercial banking-focused activities such as cash flow management or payroll can bring a level of personalization to clients that cement relationships.

“The term personalization has been around for a long time,” Cheney remarked to PYMNTS, “and usually that has meant setting preferences to the way users want the applications to work,” such as through setting alerts. “But the next evolution in personalization from an intelligent digital experience is allowing machine learning to recognize who I am, how I use the application and to automate tasks or advise me of key trends and decisions when it makes sense to do that.”

As a concrete example, consider the case of the payroll clerk who logs into an application twice a month, every month, on the 13th and the 29th of the month. It’s a repetitive task, and an intelligent solution could remind that payroll clerk of the date, offer a prepared payroll batch ready for review and, if necessary, modification. “It’s really a different level of engagement in an online cash management tool than we’ve seen before,” said Cheney.

If the ability to automate through intelligent applications is valuable, the ability to advise is critical. As Cheney noted, there are of course use cases and occasions where human intervention, and a prompt for such intervention, is desirable. That’s especially true as real-time and faster payments gain ground in commercial banking as business crosses borders. Real-time payments, she said, are irrevocable, and an extra layer of scrutiny can be useful.

In terms of a general roadmap, she said, commercial banking applications are moving toward a model where “form and substance are equally important. The ideal is one where how the solution interacts with users is as important as the feature functionality that the solution is offering. An intelligent engagement tool combines these aspects and drives relationship value for the corporate and the bank.”