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Why customer experience drives loyalty for business banking

Unlocking value

There is a tendency to think of the business banking relationship as very functional. The assumption is that there is no need for the added value tactics so necessary for building business to customer relationships.

The reality couldn’t be further from the truth. Understanding how business relationships are taking on a distinctly consumer flavour are a top trend. Samsung’s insights have revealed ‘How consumerisation is reaching B2B relationships, particularly in Finance’, while Nunwood noted that financial brands are under pressure to deliver on customer experience. Vision Critical simply stated: “Why customer insights are the same B2C and B2B - the goals are the same’.

Procurement and payments are time-consuming but necessary evils. They can be high touch but low priority because they don’t deliver direct benefits back to the company in terms of revenue generation. This makes them intensely frustrating to deal with. A business partner that can eliminate that frustration is very valuable indeed.

What business banking customers want

Simplification is at the heart of business banking customers’ needs. The mechanisms they use to buy resources, the tools they use to manage payments and the channels they use to communicate with their bankers all need to be straightforward and add value. In many ways, this means that banks need to re-educate their customers on the realm of the possible.

For example, many corporate banking customers would consider their main payment methods to be either a company cheque or bank transfer. Having had the idea drummed into them as consumers, most probably consider using a credit card for procurement as a short trip to bad debt.

But in conjunction with a strategic payments system, using credit cards for procurement is eminently sensible.

Manage spend like consumers do

For one, credit card payments are one of the simplest payment mechanisms to incorporate into a payments management system. Transactions can be tracked in real time and easily cross-referenced with extra data including location, time, frequency and so on.

This doesn’t just give the company visibility of payment history, it enables it to manipulate it to show payment trends, opportunities for streamlining and budget comparisons.

In the consumer sector, information transparency of credit card transactions is behind some of the biggest fintech disruptions. These provide customers with understanding of their shopping habits and manage their spending better. There’s no reason this can’t happen in the corporate world.

Maximise capital availability

The favourable payment terms on many credit cards (businesses are often able to extend terms beyond standard consumer payment periods of 30 days) effectively maximises the cash available to the business at any time, the working capital.

As explained in this blog, maximising working capital has several benefits. It helps the company negotiate preferential treatment with suppliers and protects cash flow. By shortening the gap (or even closing it completely) between the company’s outgoings and its income as a result of that spend, their exposure to risk is limited.

Free up staff

Streamlining payment options down to a credit card can do away with a great deal of paperwork. Purchase Orders, invoices and assorted other admin exists to protect the company’s budget from running away with itself.

Sending requests for money through several layers of management certainly puts the brakes on rampant spend, but it also ties up any potential efficiency.

In this example, using credit cards with flexible balances enables companies to make significant purchases with CFO approval without letting the business rack up spend without noticing.

Transparency of banking, spreading payments and making life easy have been the three pillars of financial disruption in the consumer sector. It follows that the business sector - made up of people who after all, are customers too - should begin to question why it can’t enjoy a bit of the financial good life too. Banks that are in a position to deliver it will be top of the tree when it comes to choosing banking partners in the future.