BMO's changes to how it organizes treasury and corporate payments can help it streamline client sales and payments product bundling.
"Historically we've taken too much of a product-centered approach," says Steve Pedersen, vice president for corporate payment products for Canada and corporate cards for North America. "We'd have the cash management person come in to speak with a prospect, then a few weeks later they'd hear from a card person, in some cases competing against himself because of the overlap."
The $593 billion-asset bank's newly branded and reorganized Treasury & Payments Solutions group will approach corporate clients with a mix of advisory services, cash management and payments toolsall product-agnostic, Pedersen says.
"We can put something together that makes sense today, but also makes it easier to evolve and add new services going ahead," says Kevin Kane, managing director and group sales manager for BMO.
The financial institution will integrate payments with broader technology and services such as imaging, receivables and payables management, fraud prevention, online reporting and online banking. Since payments tie these activities together, it makes sense to organize them as part of the same bundle, Pedersen says.
"We're a payments business. What we have tried to do is change the nature of the discussion to be payments oriented and problem solving," he says. "What we do is much more of a needs assessmentwe tell them here is a series of pain points that you have and here is a series of products."
The division can also provide a broader way to migrate corporate payments to electronic processing by demonstrating digital payments' value as part of a mix of treasury management services, Pedersen says. The services are aimed at corporate clients globally but the bank does most of its treasury management and corporate payments business in the U.S. and Canada.
There are some challenges in building the new division, including culturalthe bank has changed its evaluation of sales staff to accommodate serving diverse client needs.
"I have responsibility for corporate credit cards, but I'm the first to say that a corporate credit card is not the right solution for everybody," Pedersen says.
Traditionally he would be evaluated on his success in winning corporate card business. Now, he is evaluated on overall customer satisfaction, which could mean more use of ACH and less use of cards, he says.
"Banks should be bundling appropriate products and services to add value for their corporate clients, and to achieve optimized revenue for the bank," says Nancy Atkinson, a senior analyst at Aite Group. "Payments are an outcome of commerce, so are likely products to be bundled with other services."
There are some challenges for sales, however, Atkinson says.
"I am not convinced that sales will be that much easier, unless there is a single decision maker at the company for all of the services being melded together," Atkinson says. "One of the challenges most banks encounter with selling newer products or services, with or without payments, is getting to the right set of people at the company."
BMO is also active in other payment categories. It recently won a contract to provide BMO-issued cards to more than 100 government departments and agencies over by the fall of 2014. The deal will run through 2022. It's also working on EMV-chip card migration for the U.S. side of its business.
Other banks and payment companies are also tweaking their corporate products to encourage a greater use of cards or electronic payments. Wells Fargo is extending its corporate card offering to Europe by targeting travel and entertainment payments.