The key to relationship building: Coupling embedded payments with data

The fintech arms race over the past several years has created a new array of winners and losers in the ever-growing fintech industry. Namely, third-party providers have been remarkably successful in providing payment services and financial solutions to organizations that need them.

In fact, Cornerstone Advisors reports that small to medium-sized businesses (SMBs) spend approximately $225 billion annually on payment and accounting services from third-party providers. This has created a paradigm shift in the world of open finance and fintech, with big banks and fintechs on one side and community financial institutions on the other. However, community financial institutions can use the same technology to appeal to their SMB customers if they begin to understand the value of enabling available financial management workflows and embedded payment functionality to better serve their customers and increase revenue. Are.

a promising paying opportunity

Embedded payment workflow is a promising opportunity for banks to meet the needs of their SMB customers. By leveraging automated technology that instantly tracks customer invoices and bank data, banks can collect vast amounts of valuable information from their SMB customers. Everything from receivable and payable data to information related to financial institutions’ operating accounts and data related to specific SMBs is useful for monitoring banks.

Banks can customize this data to create unique loan solutions for SMBs with personalized offers and business services consultations as well as expanding non-FICO related underwriting criteria.

With the unique perspective of recurring invoicing and payment data, financial institutions can establish a competitive advantage over non-bank providers and anticipate future liquidity needs or appropriate financial products to help SMBs thrive .

Payment data can go much further than just helping banks. According to Mastercard, 86% of SMBs want to be able to make better use of their data, and it’s no secret why. The data present for SMBs can be employed to provide immense benefits to financial institutions and create a path to deepen important business relationships.

building relationships and wealth

Financial institutions are being placed in a key position to help interpret valuable business insights to SMBs. Data not only provides opportunities for growth among multiple entities, but it also strengthens the relationship between an SMB and its primary financial institution, as well as between an SMB and its customers.

SMBs have an innate desire to build their businesses and watch them thrive. SMBs need to establish strong banking relationships for sustainable growth. The MasterCard study also noted that 85% of SMBs claim they need a consolidated place to check their financial health. Financial institutions have often established a trusted advisor role with their business customers, and can provide an enhanced level of support and engagement that non-bank, third-party counterparts cannot.

Right now, financial institutions have a unique opportunity to better serve their SMB client base, strengthen their relationships, and grow their own revenue by combining their data with powerful insights from invoicing and payment activity. Using automated technology to track pre-existing customer data, financial institutions can provide immense support for small businesses, further streamlining their processes.

By providing this technology from a unified platform and digital experience, a financial institution increases customer loyalty and eliminates the need for SMBs to toggle between multiple mobile applications to fully manage their business finances.

As data from embedded payment workflows is adapted, the possibilities presented by a positive feedback loop between SMBs and their financial institutions are endless.

as CEO of bankify america, Keith Riddle Brings a broad range of financial services experience spanning new product development, partnership management, direct sales and strategic market planning. Keith Responsible for BankiFi’s embedded banking solutions strategy and distribution in North America.