Commercial banks are improving the way businesses make payments. They have to, just to keep up with the digital trend for making payments. Electronic B2B banking has become more convenient, easier to use and far safer than making payments in person or by mail. It’s also quicker.
And yet one out of every four large firms still conducts financial transactions by writing checks.
As Payments Dive notes, “For all of the payments innovation that’s occurred on the consumer side, advancements within the business-to-business payments space have been far slower to arrive.
Commercial Banks are Improving
Processing payments has always been a sluggish and labor-intensive part of banking — until recently. Real-time payments (RTP) were the unicorn many dreamed of finding.
The COVID-19 pandemic forced consumers and businesses to rethink how they made their payments. Lock-downs, remote work, and continuing quarantines made digital B2B payments a necessity. The fear of contracting a novel virus was the impetus needed to make contactless banking appealing. Innovative systems like the RTP system developed by Clearing House, are delivering the speed consumers seek.
Other changes may be on the horizon, including:
- Cryptocurrencies and digital wallets
- Compacted timelines for adopting digital procedures
- B2B automated payments
- An estimated $200 trillion in automated payments by 2028
Frictionless business payments are here to stay because they make every approval and transaction seamless and immediate. Going paperless has its perks.
Opportunity Awaits Commercial Banks
Application programming interfaces (APIs) are poised to help businesses switch seamlessly to digital payments. McKinsey reports, “To take advantage of this potential, banks will need to see APIs as not just a tech tool for software developers but an important strategic asset and mainstream business priority. This means building a wide bridge between the business and technology functions, which too often still operate as distinct areas.”
Businesses and technology must collaborate across five areas to transform the corporate customer banking experience:
- Developing a strategy for execution.
- Creating agile, cross-functional teams
- Adopting open source technologies
- Training talent and encouraging innovation
- Initiating an implementation plan.
Modern business is changing the way B2B payments are made. Payment trends during the pandemic show consumer payments shifted to contactless cards and digital wallets; more B2B payments went digital.
When recruiting for your commercial bank, make sure you are finding candidates who possess these emerging skills. Working with a recruiter can help your odds at getting the best in the field.