How Financial Institutions can Make B2B Transaction Seamless for Their Customers

“PSPs and other financial institutions must invest their resources in their customer relationships. This enables them to support those businesses as they aim to seize opportunities in the new economy”, says Anders la Cour, Co-founder and CEO, bankingcircle in an exclusive interview with EnterpriseTalk.

ET Bureau: How can payment service providers (PSPs) seamlessly integrate real-time payments for B2B transactions without having to invest a significant amount in their internal infrastructure?

Anders la Cour: The payments industry is an incredibly crowded and energetic market which means customers have high expectations. They expect results in an instant, but achieving real-time payments, particularly cross-border, is no mean feat. Payments must be processed quickly and they need to be regulated effectively.

However, building internal infrastructure that supports this from the ground up can be costly, time-consuming and incredibly complex for a PSP. And that’s even without procuring the right Banking Licence, which could take years. Partnering with a fully licensed payments specialist handles a lot of this ‘heavy lifting’ for PSPs.

ET Bureau: How can financial institutions support their customer base to achieve their international trading ambitions while managing the risks associated with it?

Anders la Cour: PSPs and other financial institutions must invest their resources in their customer relationships. This enables them to support those businesses as they aim to seize opportunities in the new economy.

Moreover, they can work with a payments specialist to tap into their global banking network. With direct access to clearing, PSPs can deliver real added value to their business customers. The end game for PSPs is to solve the problem of managing and handling cross-border payments while reducing the cost, time spent, and complexity to provide better assistance to their customers.

ET Bureau: What steps can financial institutions take to secure their infrastructure in a constantly evolving financial ecosystem?

Anders la Cour: In today’s digital world, the only way financial institutions can future-proof their infrastructure is to have an open mind to how they stay ahead of the game. And that most likely means partnering with specialists who have technology at the heart of what they do. In particular, partners who build their solutions in the cloud are crucial because it’s so flexible that upgrades and replacements can be made easily.

It’s also important for financial institutions to look for partners who apply decoupled architecture to their solutions. This enables them to update or replace individual pieces of architecture with limited impact on the rest, quickly adding more functionality, working within new geographies and remaining fully compliant with regulation. And that all means the service for the financial institution is agile and adaptable to changing customer needs.

ET Bureau: What trends do you think will transform the B2B financial services industry?

Anders la Cour: The global adoption of real-time payments is already transforming the industry, and it’s the customers that have propelled this forward. Customers want a frictionless payment experience which means merchants, and in turn, PSPs and banks, need to step up.

What’s more, the desire to have everything in one place instantly will only grow; financial services must be agile in order to meet this. For banks, this means partnering with FinTech partners and for PSPs this means widening their offering.

In terms of back-office processes, regulation is in the midst of an AI and machine learning revolution, which is incredibly exciting. AI greatly reduces human error and can flag patterns that we would never be able to ordinarily spot.

This means the chances of catching fraudsters would rocket. That said, many regulators are still uncomfortable with the idea because it means trusting a machine. This needs to change. It’s not about replacing humans with robots, it’s about empowering individuals with tools.