Fintech
Bank of America’s Strategic Shift to FinTech Collaboration
In a rapidly evolving business landscape, standing still can be fatal.
Digital innovation has sharpened the blade of inertia, and collaboration between traditional banks and FinTech companies is becoming essential for competitive differentiation.
Banks and FinTechs partnering allows each party to focus on their core strengths. Banks can continue to offer the right products and services, while Enterprise Resource Planning (ERP) and Treasury Management System (TMS) providers can optimize their software solutions.
“Companies can focus on running and growing their business without having to spend a lot of time on technical integration of the bank,” Meg GarandCashPro Payments and CashPro API Manager at Bank of Americatold PYMNTS.
Business needs for data reporting and payments have never been greater, so simplifying the integration of solutions that support those needs is critical to growth.
“When we think about cash flow, payment information and other information that customers can have based on their transactional data through APIs, that same data is integrated into the customer’s ERP and TMS, so that information can be captured within their ecosystem as well,” Garand said.
Evolution of Bank-FinTech Partnerships
Over the past three years, Bank of America’s CashPro team has evolved its approach to working with FinTechs, and Garand says a key driver of that evolution is a customer-centric strategy aimed at understanding and meeting customer needs.
“Our customer experiences are central to our strategy,” he said. “We want to make sure customers have easy access to meet their working capital needs, and faster integration with Cash Flow really enables those capabilities and puts them right there at their fingertips.”
Garand noted that Bank of America’s CashPro team serves more than 40,000 enterprise clients, ranging from small businesses to global multinationals. It has partnered with large-scale ERP and TMS providers around the world as part of its CashPro network. This network simplifies integration for clients, efficiently meeting their data reporting and payments needs.
Despite the benefits, establishing and maintaining these partnerships between banks and FinTechs is not without its challenges. Given the wealth of options that populate the landscape, prioritization is a challenge, as it involves selecting the right providers to partner with based on the greatest potential benefit to end customers.
“We rely on our customers to advise us on this, to tell us where we should prioritize our resources and what we want to bring to market to best meet their needs,” Garand said. “Our goal is to serve our mutual customers and make sure we’re laying out a path to integration that ultimately leads to customer adoption, so they can see those benefits.”
“We also want to make sure that we’re aligned with the strategic roadmap of the ERP and TMS providers,” he added. “There’s a lot of conversation to make sure that we have that alignment and that we’re really focused on the right ones.”
The Future of Banking and FinTech Collaborations
One of the most attractive benefits of successful partnerships between financial institutions and FinTechs is the potential for reduced implementation timelines and roadmaps.
As Garand put it, “shortening the time to use” (from agreement to implementation) is at the top of many end customers’ wish lists when it comes to digital transformation.
“A typical customer is one that is focused on automatically entering their data into their ERP or TMS system,” he said, noting that while in the past that process has taken four to six weeks, “we’ve had a number of customers activate today’s and/or yesterday’s reporting across all their accounts within a week.”
“The time savings are really huge,” Garand added.
The ease of integration provided by banking and FinTech partnerships also translates into reduced manual work, allowing staff to focus on strategic efforts. Garand observed, for example, an entertainment company that previously took 10 days for monthly reconciliations can now complete the process in 2½ days thanks to the CashPro API integration with its ERP system. This automation not only saves time, but also allows staff to allocate their efforts to more value-added activities.
Ultimately, the collaboration between traditional banks and FinTech companies is a step forward in scaling digital innovation in the financial sector. By leveraging their respective strengths, banks and FinTechs can provide superior solutions, streamline processes, and deliver added value to their customers.
Looking to the future, Garand stressed the importance of banks not only as providers of products and services, but also as advisors, helping customers improve automation and adopt the right payment technologies.
See more in: From B2B, B2B Payments, back office, banking fintech collaboration, Bank of America, CashPro, CashPro API, CashPro Payments, commercial payments, digital integration, digital transformation, enterprise resource planning, ERP, Featured News, Meg Garand, News, partnership, PYMNTS News, pimnts tv, Magnetic stimulation, treasury management system, video