Tearing Down B2B Payment Silos with Integrated Receivables Solutions

Originally published on PYMNTS.com on 10/20/2015.

For a corporate treasurer to be able to view all of his or her company’s receivables in a single look sounds like, in the words of MPD CEO Karen Webster, “manna from heaven.”

FTNI (Financial Transmission Network, Inc.) is turning that dream into a reality with its Integrated Receivables solution, which focuses on eliminating siloed payments within corporate organizations.

Can it work? Yes, provided — as Kurt Matis, President and CEO of FTNI, discussed with Webster — that a corporation has an understanding of its primary pain points and the patience to address them one at a time.

KW:  One of the most intractable problems in B2B payments today is managing receivables. Tell us how FTNI’s Integrated Receivables solution works to address that.

KM:  Having grown up in the corporate treasury space, I understand the problems with siloed solutions. A big headache in the accounting world — and the treasury management world — is the necessary process when things don’t go smoothly: exception handling and human error requiring multiple software updates or training issues when you’re replacing employees, and so on. Just managing silos is very expensive and brings in a lot of operational inefficiencies.

Historically, an organization might have one solution from a bank or third party for check scanning, a second one through their software or secondary party for ACH origination, perhaps a third through their merchant processor or a software vendor for credit card processing, maybe another vendor for Web payments…and so on.

What Integrated Receivables does is eliminate those silos and puts all those different payment methods and channels under a single solution, so those corporate treasury professionals can have one solution for oversight, one solution for reconciliation, reporting, etc. — and only one connection point to push that into their back-end accounting or CRM solution.

KW:  How complicated is it to actually collapse all of those silos into your Integrated Receivables solution?

KM:  The nice thing about the integrated solution that we’ve put out and some of those from industry leaders have is that they’re modular. You don’t have to tackle every pain point at the same time.

When you’re working with these corporations, you look at what the pain point is: Is it check scanning? Is it remittance document handling? Is it Web payments? You help them with that one area and then — if you’re using a modular solution — very quickly, you can add other areas.

 KW:  Mutual of Omaha recently deployed this integrated receivables solution. What was their pain point and how did you solve it for them? 

KM:  Both Mutual of Omaha Insurance and Mutual of Omaha Bank are clients of ours. On the insurance side, one of the headaches for many companies is that a lot of them are running old policy administration systems that go back 10, 20, 50 years, to before there were a lot of credit card payments or security issues; they need to move the risk off those antiquated systems.

With Mutual of Omaha Insurance, we actually took over all of their Web payments, all of their new policy payments. Because we’re SaaS-based, we were able to integrate into their website and into their third-party partner marketing companies and make sure none of that credit card information ever touched their Web service; so it took them out of PCI scope. And because it’s an integrated solution, we were able to take over some of their other payments.

For Mutual of Omaha Bank, we similarly took over a lot of their Web payments; now, we’re rolling out a solution for their HOA business so that 25,000-plus HOAs can have their own websites with expanded capabilities and without having to worry about PCI compliance. Also, they can scan checks at those professional property management locations; whether it’s a payment through a website or a payment that is scanned on the premises, they’re going to get a global view of all of them through one single reconciliation point, on one dashboard. It really streamlines that whole process.

KW:  Are there other financial institutions that are looking at your solution as a capability that they could extend to their customers? 

KM:  Yes. In the past 6 to 9 months, we’ve seen that a lot more banks are looking at integrated receivables. There have been a couple of recent studies showing that somewhere in the neighborhood of over 90 percent of banks think integrated receivables is a key point for their corporate clients. In the treasury management services area, they also think it’s going to be a major source of revenue generation.

We’re seeing a lot more banks that have been selling, in essence, siloed solutions — maybe an RDC product or an ACH product — to their corporate clients, but the adoption wasn’t great and they’re starting to get the feedback that integrated receivables are really key to expanding those relationships.

KW:  When you’re consolidating all of these silos into one point of visibility, there are obviously lots of benefits that can be gained. What do you hear from your clients about the things that are most important to them, other than solving for their initial pain point?

KM:  One of the things that we continually hear from our clients is that they’ve got greater visibility into their entire payment chain. In the integrated environment, we’re in many cases dealing with multiple payment types, sometimes from multiple locations — that could be 300 or 400 throughout the U.S. and Canada. When you’re talking about a corporation that can sit at the home office and see all payments coming in, in real time, from every location, they’ve got great visibility.

Due to our agnostic capabilities, as their business grows — and they maybe go from running on a small accounting system to a larger one — we can just plug into the new one and still give them that straight-through process, without them having to learn a new system or new training. If they have issues and they need to change merchant processors, they want to add banks or replace banks, we allow them that flexibility to grow with their businesses and really offer them savings no matter how they want to do it. That includes if they want to move into Web payments, or mobile payments. It’s not something where they have to go to a third party and find a solution, and test it to see if it’s viable; we can very quickly add that capability in way that is very cost-efficient for them.

KW:  From what I hear from corporates when they’re looking to deploy new technologies, it isn’t so much the technology that is the barrier for getting things done, it’s the process and all the things that have to change in order to accommodate it.

Is that one of the big inhibitors to innovation in the corporate payments space? And if so, how are you helping to break those barriers down? 

KM:  I think it is a big inhibitor. What happened historically in the software environment, when companies would come out with new products maybe every 6 months or every year, they would go to their clients and say “give me your wish list” and end up with maybe 50 or 70 items on the wish list and at the end of the day, they’d have to get that down to maybe 10 or 15 items. If I’m a corporation that wanted five things, I maybe got one of those enhancements, because the software companies went by what the majority wanted.

Now, in the SaaS-based environment, it’s easier to configure. We have configurable data fields that we can take to an insurance company one day and a nonprofit the next. You can change the fields quickly and, because it’s delivered in a fast-paced environment, if the user wanted enhancements, you could literally log out, log back in and show them immediately. You’re able to really customize a solution and deliver it much more quickly and much more easily than you were in historical processing environments.

Because of that, you’re not having to make the users change their operational processes to fit the software; the software can easily be configured to fit their operational processes.

KW:  What areas of corporate payments do you think are still broken and need innovation to alleviate some of the pain that you’ve found on the receivables side?

KM:  On the receivables side, there are still a lot of issues with remittance documents.

Some of the technology is improving, but what you’ll typically find is that none of the remittance advices are the same between any two corporations. So you’re still having problems not just with the payment, but with the associated data.

Many of these companies are trying to move to electronic invoicing, electronic bill presentment and payment (EBPP), but it’s difficult to get that data out and get the same data back for posting and not try to add a step to the process.

KW:  What’s next on FTNI’s roadmap?

KM:  We’re still going deeper into some new technology to be able to read remittance documents better and pull more information off the documents for posting.

We continue to add new enchantments: As corporate clients are now interested more in mobile solutions for their reps in the field, we’ve added a mobile solution that handles credit card, ACH, check, and EBPP payments, and is able to match it for posting either batch or real-time. Any type of payment that a corporation can touch, we’re getting it on that single solution.

We’re also having talks with banks about — as they’re looking to our solutions more as a true treasury platform for corporations — having real-time bank balances on the same platform, so that they don’t even have to log into the bank account to see them.