Over 50% of FIs Say Admitting Need Is First Step Toward B2B Payments Progress

Modernizing payments is a critical initiative for financial institutions (FIs) and the companies of all stripes and sizes that depend on them, and yields critical benefits.

It makes business-to-business (B2B) payments, cash management and invoice reconciliation less complex and easier to manage. It can also give companies access to supplier portals and real-time reporting on revenue flows.

Although FIs of all sizes are committed to adopting solutions to address B2B payments frictions, the path to payments innovation can be lengthened or shortened by myriad variables, according to “Meeting the Challenge of Payments Modernization,” a PYMNTS and FIS collaboration based on a survey of 311 executives leading FIs that manage assets in excess of $500 million.

Get the report: Meeting the Challenge of Payments Modernization

For example, 19% of respondents say perceiving new B2B payments solutions as useful is the characteristic that is most helpful in FIs’ adoption of new digital solutions to address B2B payments frictions. Another 33%, meanwhile, said it was helpful — if not the top factor driving change.

Improving the Customer Experience 

For banks, boosting back-end systems while improving the customer experience is a never-ending effort, FIS Chief Data Officer Bob Legters told PYMNTS recently.

For example, in the B2B realm, FIS’ own banking clients have been working to integrate with suppliers and vendors to foster a wider embrace of integrated payables to make sure that money can move faster, Legters said.

Read more: Instant Payments and Data Unlock Contextual Banking Opportunities for Consumers

The urgency is there, Legters said, as the sheer volume of transactions is on the rise across all manners of engagement, from simple payments to streaming media subscriptions.

PYMNTS research found that community banks agree in the largest share that perceiving new B2B payments solutions as useful is the most helpful characteristic driving modernization. Twenty-three percent of community banks say that characteristic is most important, followed by 20% of large national banks, 19% of credit unions and 17% of regional banks.

Innovating or Planning to Innovate 

Despite any obstacles or hindrances they might face, nearly all FIs — 92%, in fact — say they are currently innovating or plan to innovate embedded finance experiences, according to PYMNTS research.

FIs exhibit different approaches to address B2B payments frictions depending on their size, as each type faces select challenges when looking to meet their corporate clients’ digital payments needs.

Still, PYMNTS research found several areas where FIs of all sizes may struggle to offer the digital tools their clients need, and these areas frequently coincide with the top digital payment B2B frictions their clients are experiencing.

Identifying and implementing the right digital payments tools can help FIs address these concerns and provide their enterprise clients with more seamless B2B payment experiences.

When creating a technology stack becomes resource prohibitive — or when solutions are inadequate — an enterprise-grade technology solution could put FIs and their corporate clients on the fast track to innovation.