U.S. Bank responds to fintechs by digitizing supplier payments
As the pandemic transforms the way corporations pay suppliers, many banks are watching nimble fintechs rush in with streamlined solutions customized for remote workforces.
U.S. Bank didn’t want to risk getting cut out of that equation. Working with Bottomline Technologies, it's developed a fully integrated digital AP solution rolling out Tuesday for large and midsize customers that operates across all channels through a single login.
AP Optimizer leverages Bottomline’s technology and global supplier database to provide bank customers with a view of their full AP process in real time — from outstanding, paid and in-progress bills — which Nicole Tackett, U.S. Bank’s senior vice president of product and strategy, says is an industry first.
“No other financial institution currently offers a fully integrated AP solution of this scope with real-time visibility into all payments including wire and ACH, with the ability to track all accounts payable and associated invoices,” Tackett said.
In recent years, U.S. Bank’s customers have used a combination of electronic and manual methods to track AP transactions, but the pandemic created urgency to align all supplier payments through a single lens, she said.
“When there were suddenly a lot of people working remotely, COVID-19 really brought to light the points of failure in manual and paper processes,” Tackett said.
AP Optimizer also extends U.S. Bank's reach further into corporations’ operations.
“The solutions we’ve offered in the past were very payment-oriented and now we’re integrating payments directly into corporations’ AP processes,” Tackett explained.
Bottomline Technologies has partnerships with many corporations and banks, but its collaboration with U.S. Bank is different, according to Brian Greehan, Bottomline’s senior vice president of channel and network success.
“What makes this partnership unique is that U.S. Bank has chosen to wrap Bottomline’s financial technology into an existing suite of solutions that’s already defining where businesses need to be, deepening the bank’s connection with businesses across their footprint," Greehan said. Bottomline is based in Portsmouth, N.H., with 22 offices in nine countries.
Some large corporations have developed their own integrated AP solutions, but that's still not common across the spectrum of midsize- to large corporations, and many companies have outsourced various tasks around digitizing payments, Tackett said.
AP Optimizer is modular, so corporations can adapt its elements to their own platforms and ERP systems as needed.
“This isn’t a solution where the customer has to bite off the whole apple — they can opt to use just the pieces they need,” Tackett said.
AP Optimizer's cost to bank customers is based on which modules of the solution they use. Companies can offset those costs through rebates for using certain types of digital payments, and overall they will see longer-term savings from higher efficiency and fewer errors, according to Tackett.
Switching on AP Optimizer isn’t turnkey, however. It will take about 90 days for corporations to build up the new solution, which doesn't rely fully on APIs like many B2B payment solutions fintechs are developing.
“To start off, we’re working with customers in a user interface and connecting to Bottomline through various pathways, while looking to use APIs more broadly later on,” Tackett said.
Tackett doesn’t see the gap between AP Optimizer’s longer integration process and fleet-footed API-based fintech payment solutions as a big issue.
“We’ve had to define what APIs mean to our customers. Lots of fintechs do some portion of the payments value chain, but we’ve put together an end-to-end solution with best-in-class elements. We are the payments experts, and Bottomline is the technology expert here,” she said.