The World Trade Organisation has shown that since 2005 world trade merchandise has grown an average of 3.7% annually (outpacing global GDP at 2.3%) and as a result the cross border payments market has never been more vibrant. More and more customers both business and consumer are moving online to conduct their payments, which need an ever expanding global reach, and many organisations have now realised their web solutions have not kept pace. Non-bank providers of payment services have been listening to these customers for years and more recently banks seem to be waking up as well. It’s finally the banking industry’s time to ensure a customer-centric e-solution approach to both domestic and cross border payments.
Dissatisfaction amongst customers
Today’s customers demand a rewarding experience every time they interact with an organisation. If customers are not satisfied with the service and offering being provided, they will consider moving to an alternative supplier. Customer dissatisfaction in the online payments area appears rampant with one survey of FTSE500 treasurers showing 63% were dissatisfied or highly dissatisfied with their bank’s e-payment services, while another study showed that 80% of corporate customers choose their bank on the basis of technology offered and more specifically based on the online and mobile services offered.
Another often heard complaint is that customers seek a single solution. They do not want to manoeuvre between various sites or providers to conduct their domestic and cross border payments. Many corporate treasurers today hold non-resident accounts just to facilitate their cross border payments. This motivated Eurobase Banking solutions to expand its Siena e-trading solution and provide a payments component – Siena ePayments. This offering is built upon on the same business logic and processes that already exist for the single dealer platform. Siena ePayments solves the issues that many banks are facing. One such issue is that customers are complaining that they have no transparency of FX rates used for conversion until after a transaction is completed. Also, unclear fees are another concern for customers. Siena ePayments allows a clear understanding of fee deductions with transparency, while additionally providing much deeper reporting capabilities.
Competition from Fintech payment providers
An unprecedented level of competition from non-bank payment providers is driving innovation. Some companies are trying to tackle the speed and cost issues surrounding payments and others are providing links into domestic clearing systems in an attempt to bring down costs. Legacy non-bank money transmitters that work with both the B2B and consumer space are offering a customer centric payment experience, but still largely rely on the traditional banking networks. While many of the new FinTech solutions could be game-changing, it will be exciting to see which ones really take off in the years to come. However, unless they are integrated into the banks’ wider payments strategy, customers will be left having to navigate among numerous providers, none of which will provide a comprehensive one-stop-shop.
Improving an e-payments strategy
Improving one’s e-payments strategy, particularly with cross border payments, is critical in today’s global marketplace. Those banks that are lagging behind are already losing customers as evidenced by the growth rates of the non-bank payment providers. Organisations need to focus on a comprehensive strategy that addresses the immediate demands of the customers while also looking at ways to advance their payment delivery channels. This can be a daunting task especially when mandatory and urgent regulatory and compliance remits often take precedent.
One way to approach this is through a stepped approach to the strategy, with incremental improvements such as improving the customer’s e-payments experience. Does the organisation have a cross border e-payment solution for their customers that can address the issues of providing live FX rates? Are fees transparent? Are there robust reporting features and the ability to integrate data into the customers’ financial accounting packages? An improved e-payments web solution can quickly provide marked visible improvements while the organisation determines if it wants to harness improved delivery technology.
With data breaches flooding the news, security and data protection is another important concern and an organisation needs to carefully weigh if a cloud-based solution, hosted or on premise solution is best for them.
At Eurobase Banking Solutions we have listened to our customers’ challenges in the e-payments space which is why we expanded our Siena eTrading and Treasury Management solution to now offer an e-payments component. Siena’s modular components easily integrate with existing infrastructure. The Siena ePayments component offers a quick time to market, feature rich software solution that can enable organisations to quickly improve their customers’ experience for cross border payments while enabling the scope easily to integrate expanded payment delivery strategies over time and provide a building block to a larger payment strategy.