This focus can result in missed opportunities for financial institutions (FIs) to improve the experience of their corporate and business customers – who are consumers themselves.

While B2B payments comprise a signification portion of global transaction volumes, what about B2B2B payments where the “third B” can represent a multinational corporation (MNC), small merchant or even a regulator?

This concept of the ‘third B’ has been thrust into the spotlight, since they are increasingly demanding the same speed and convenience of their wholesale payments that their personal payments deliver. In addition, the proliferation of banking transactions has been followed by an expansion in regulatory requirements globally and the need for new compliance tools to manage them.

Meeting the needs of the ultimate customer with products, services or solutions means focusing on the customer outcomes throughout the value chain. That value chain includes more than one ‘B,’ which inevitably means that the third ‘B’ will be a customer at a given point. They play a vital role in delivering successfully to the customers’ customers.

Finextra spoke to Esther Mendez, worldwide banking and payments leader - Amazon Partner Network, and Mark Smith, head of payments business and market development, at Amazon Web Services, about the concept of B2B2B in banking and payments, specifically how cloud can help FIs meet the needs of their corporate and business customers by increasing security, transparency and personalisation.

Mobility for business bankers

Mendez highlights that the focus on retail banking has been driven by “the consumerisation of mobility” and that “the mobile device has become a companion for many aspects of life beyond just communication.”

“I don’t think the consumer gave up on the rest of other channels; I think they prefer this one because it’s easy and because of the convenience that it provides.” Mendez goes on to explain that this “explosion of mobility” has resulted in more digital, real-time and customised financial services, in a similar way to how fintech firms meet the needs of their customers.

A growing number of payment companies are treating their business products more like their consumer-facing counterparts. Smith says, “Within global financial services, we are holding significantly more digital innovation sessions where we collaboratively work backwards from customers to build better applications that serve their businesses. FIs are increasingly investing in their own customer-facing channels: mobile applications, web portals, call center agents and chatbots, and they want them to do more than conduct transactions”

Personalisation is key

Mendez highlights that “corporate treasurers have always looked after their cash management and liquidity positions on a daily basis, but now, these executives are questioning why the improvements in their personal banking and payments experience don’t always carry over to their work life.”

Many FIs are challenged to deliver personalised customer experiences, as they have usually grown through mergers and acquisitions where departments continue to operate in a siloed manner. Mendez states that even at the point of integration, transformation is limited when the institution does not have a comprehensive, single view of its customers.

Cloud solutions offer FIs the ability to aggregate their vast volumes of data in one place and make it more readily available for advanced analytics to drive actionable and timely insights that improve customer experience. For instance, FICO’s centralised decisioning solution powered by AWS enables FIs to pull customer data from different sources.

Mendez elaborates: “FICO is helping FIs get extremely targeted about whom they want to approach and with what offerings. FIs can quickly and easily pull and analyse information in order to create specific campaigns for customised products and services in the preferred channels of the target audience.”

Facilitating regulatory reporting

Managing data also extends to regulatory compliance for FIs. FIs must understand the impact of new and changing requirements such as GDPR, PSD2 and others.
The complex, evolving regulatory environment requires vast amounts of data to be collected, normalised and turned into the information needed to meet reporting requirements. Meeting these demands may be both costly and inefficient given the disparate systems across FIs; however, ignoring them is not an option.

“Banks are responsible for providing accurate, timely and increasingly specific information to regulators, which means they have a growing need for agility and transparency. They have a platform in the cloud, which offers unprecedented capacity and scale,” according to Mendez.

When regulatory reports become too complex for FIs to manage in-house, cloud solutions may be the answer. For instance, Moody’s Analytics helps banks empower their internal users with greater data ownership using a SaaS approach running on AWS.

Mendez states, “Moody’s Analytics gives greater flexibility and autonomy to the individuals within the financial institution by allowing them to leverage their expertise and anticipate an evolution in the requirements. They can make the required changes to reports in near real time, review and then, file - enabling the regulators to get what they need.”

The SME level

Even though small- and medium-sized enterprises (SMEs) often lack the resources and technical depth of the MNCs, they still need the same speed and agility to launch new products and meet customer needs.

“Smaller merchants look to cloud for support, because they don’t want the maturity cycle to limit the experience they provide to customers,” Mendez explains. “The cloud levels the playing field: it offers elasticity, cost efficiencies and security to all.”

Smith continues, “With AWS, payments companies are using new data types, streaming data, data lakes, and machine learning to make rapid credit decisions, reach new customers and deliver on expectations. Their end customers want high-speed, low-effort experiences, and they must make better use of technology to stay competitive and combat slimming margins.”

Access to working capital is another common SME challenge. Behalf is a digital platform that provides on-demand cash flow solutions, helping SMEs where they need it the most by increasing their purchase capacity.

“Behalf can conveniently be used for business purchases in place of nearly any other payment method,” Mendez says. “Companies who accept Behalf get paid immediately - at a transaction cost far lower than credit cards. Meanwhile, companies choosing to pay with Behalf instead of cash, check or credit card get to customise their own payment schedule for each purchase.”

The takeaway, according to Mendez, is that while the build vs. buy debate is not new for FIs, the link is not as solid as it used to be for SMEs and MNCs who are moving to a mix-and-match approach. “What we are seeing is the laser focus on faster innovation where getting a new product or service out to market in two years is no longer acceptable.

Financial services institutions have raised the bar by leveraging cloud solutions from the AWS Partner Network, our global community of technology and consulting partners, to serve their business and corporate customers.”