Banks are an integral part of business financing globally. While most financial institutions cater to individuals, some services are ideal for commercial customers. Because of this, the number of commercial banks insured by the Federal Deposit Insurance Corporation (FDIC) reached 4,236 by 2021.
To serve commercial clients better, banks must provide quality products and excellent services such as lower fees, faster processing times, higher returns, and more innovative digital services. Fortunately, in the corporate banking industry, technology has continued to evolve, making it possible for financial institutions to keep up with the needs of their commercial customers.
Constant innovation in the banking industry means that banks leveraging software services compete much better for customer loyalty. Therefore, banks are now partnering with third-party payment processors to adopt technologies that allow them to hold on to their commercial clients and drive new business. Here, we look at how banks use software solutions as a service and innovative payment methods to make transactions easier for their commercial customers.
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What Services Do Banks Provide for Commercial Customers?
Commercial banks serve both small businesses and large companies with varying financial needs. Before adopting software solutions, every bank needs to understand the services its commercial clients expect. These include:
- Deposits: Businesses need a checking and savings account, which they use to make payments to their employees and suppliers and to hold cash reserves for the company.
- Credit Facilities: 43% of small businesses applied for a loan in 2020 to meet their needs. Commercial customers need loans to expand and finance their operations.
- Foreign Exchange Services: If the customer deals in imports and exports or accepts cross-border payments, the bank offers foreign exchange services for seamless cash transactions.
- Investment Banking: Companies going public, merging, or acquiring another company require a bank to help with corporate debt offerings and business valuations.
- Payment and Transaction Processing: Businesses accept payments differently, from credit cards and paper checks to electronic checks. A bank manages these transactions using various technologies.
The 5 Ways Banks Leverage Software Services for Their Commercial Customers
#1 Digital and Mobile Technology Adoption
The global digital banking market was estimated to be $12.1 billion in 2020 and might hit the $30.1 billion mark by 2026 at a CAGR of 15.7%. Customers today are drawn more to financial institutions that provide mobile and digital services. Therefore, as a bank, you can serve your commercial clients better by establishing an app to enable mobile banking.
Digital services allow customers to access banking services 24/7 compared to traditional physical branches that operate only during regular business hours. You manage more clients, attract more commercial customers to open an account with you, and generate more revenue in the long run.
#2 Offering Business Management Solutions
Take advantage of accounting software and payment solutions that allow you to address a client’s broader needs. Your customers need to manage payroll, accounting, invoicing, financial planning, taxes, procurements, and other business functions tied to cash flow. Once you adopt these software solutions, your clients can collect payments, process invoices, meet their tax obligations, and service business loans more seamlessly.
#3 Using B2B SaaS Partner Programs
A B2B SaaS partner program allows you to expand your reach, increase revenue and build customer loyalty. For instance, if you have a business client that offers solutions as a service to different clients, you can partner with them to bring in more commercial clients to open accounts in your bank.
#4 Using ISO20022
Due to the demand for faster payment systems, there is an increase in the number of players in the financial market infrastructure. Ease communication for your commercial client by adopting ISO20022—a global standard language used by financial institutions to communicate with each other.
Adopting this new vocabulary allows you to automate client payments, track expenses, enhance security, and process multiple payment methods across international borders.
#5 Partnering with a Reliable Payments Processor
Do your commercial clients need to process credit card payments, ACH, IVR, recurring, or hosted payments? Choose a suitable payment processor to take care of this. The top payment processors are reliable and scalable, providing comprehensive support and adoption for various innovative technologies. They also offer excellent security and compliance while helping you with faster payment systems.
Technologies Banks Can Use To Serve Commercial Clients
Every commercial bank should provide ACH payment methods. Some core benefits of the ACH technologies include:
- Lower processing fees
- Support for automated payments
- Reduced human error
- Exceptional security with authorization
Nacha-preferred partners help banks process ACH payments for their clients securely and reliably.
A virtual terminal helps eliminate paper-based accounting and creates a digital trail of all the payments. This technology comes with customizable dashboards to help you track information on all payments, and it integrates quickly with all accounting tools. Virtual terminals help commercial clients manage their business collections and payments on a single comprehensive platform.
The Interactive Voice Response (IVR) payment service is brilliant for no-contact payment collection. Businesses can submit payments to the bank using a keypad or voice recognition for fast and instant transactions. IVR allows credit card, ACH, and eCheck transactions. It’s also PCI-compliant, reducing the PCI scope at your end by ensuring that no sensitive customer payment information stays on your system after the transaction is complete.
Check verification technologies help banks accept payments from their commercial clients while preventing fraudulent activities. Modern check verification systems confirm their validity and identify fake checks in real time to prevent fraudulent payments. Here are the five most important components of an advanced check verification system.
The Benefits of Using Software Services as a Bank
Security: Most payment methods, like ACH transfers, are highly secure. To prevent fraud, you can reject the payment as a bank if the customer information is invalid.
Cloud Technology: The evolving banking technology allows banks to use highly secure cloud technology. That allows the bank to integrate different technologies and protect customer data.
Technology development makes commercial banking seamless. Banks can leverage different software services to provide excellent customer service to their commercial clients.
At iCG, we’ve got your back. We help you optimize ACH and merchant services accounts for your clients.