Financial institutions (FIs) and their corporate clients share an interest in improving business-to-business (B2B) transactions by removing friction from payments and cash management processes.
Even so, there are also some shortfalls. For example, FIs say two areas that stand out as being the most problematic for their corporate clients when paying their suppliers are invoice reconciliation and the inability to offer supplier portals.
In fact, 42% of FIs say that invoice reconciliation is a problem their clients face, with 9% citing it as the most important problem, according to “The Innovation Gap,” a PYMNTS and FIS collaboration that surveyed 311 executives from institutions with more than 500 million in assets.
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Forty-two percent of FIs also cite the inability to offer supplier portals as a key problem for their corporate customers’ experiences, with 15% reporting this as the most important issue.
Other common frictions enterprises of all sizes experienced include poor working capital management due to a lack of cash flow visibility at 34%, slow underwriting at 33% and a lack of payments choice at 31%.
Identifying Corporate Clients’ Needs
It’s easy enough to understand why suppliers want online portals, for example, FIS Head of Strategy for Business Payments Matt Collicoat told PYMNTS in a recent interview: there’s a benefit in knowing where payments are at any point of the journey.
FIs have made efforts to meet their corporate clients’ ever-increasing needs for fast, secure and seamless B2B transactions during the past year, and many have attempted to create their own digital solutions to address existing payments frictions. However, less than one-third of FIs say the current solutions they offer are “very” or “extremely” effective at addressing the challenges and frictions in B2B payments.
PYMNTS’ data also finds that two-thirds of FIs believe that B2B digital payments solutions are “very” or “extremely” important. As a result, two-thirds of FIs say they are “very” or “extremely” willing to adopt new technologies to facilitate the consumerization of B2B payments.
The areas in which FIs struggle to offer corporate clients digital payment solutions coincide with the top digital B2B payment frictions that their customers are experiencing. Identifying the problem areas and offering solutions to address them can help FIs provide their enterprise clients with more seamless B2B payment experiences.
Partnering with Solutions Providers
In their efforts to address their clients’ concerns and provide enterprise clients with more seamless B2B payment experiences, many FIs may find it advantageous to partner with solutions providers.
FIs and corporations seeking to eliminate corporate clients’ payments frictions should seek out technology providers that allow them to offer cutting-edge digital payments tools and in-demand features such as supplier portals without being forced to mix and match point solutions.
A modern payments technology stack, for example, can bundle accounts payable (AP) and accounts receivable (AR) services in a scalable ecosystem by using modular features to synchronize with enterprise resource planning (ERP) or accounting and banking systems.
Finding the most suitable technology solutions partners to modernize B2B payments processes enables FIs to offer corporate clients the features they need to manage and streamline transactions.