As banks race to find non-fee revenue and create long lasting, mutually beneficial relationships with clients, many are investing in new merchant services capabilities.  What we’re seeing though, may be eye opening for banks going through this journey.

It is 70% less expensive for a fintech to onboard a mid-size or commercial client than a bank.  That’s big dollars, especially when banks and fintechs are on the same journey but approaching it from two different directions.  FinTech’s started with merchant and worked outward to deposits and cards whereas banks are working the opposite direction.  This means that many expensive legacy banking platforms impact speed to market and budget.  How are banks going to compete?

On average, banks take 10-12 months to onboard a merchant.  They have back and forth with forms, phone calls, emails, and faxes to transfer the appropriate documentation.  This leads to frustrated clients and lost revenue and will continue until banks make a conscious effort to evolve into the digital world.

It’s not one size fits all, midsize and commercial clients expect different experiences.  For example, midsize clients likely have a centralized procurement and finance function with a handful of people, whereas commercial clients have multiple divisions.  This means they desire a different experience tailored to their needs.

Assisted – Typically used by mid-size businesses, a digital experience where a business owner can self-board but have a ‘lifeline’ to a banker or support associate to help them along the journey. The option for fully digital is there, of course.

Facilitated – A client manager or ‘Sherpa’ is assigned to onboarding this client. This team will assist with hierarchy set up, reporting, access, installation, and training.  While digital tools are similar with Assisted, there is not a ‘self-service’ boarding experience as the margin for error is so large (and most commercial clients don’t want self-service anyway).

Companies want simplicity.  Banks are well positioned to offer simplicity, especially those with the breadth and depth of financial products, including merchant services.  The best way to earn more business is to deliver the experience clients want and need.

The XUP platform facilitates boarding for mid-size, commercial, and franchise clients – reducing onboarding time and expense by up to 60%. Schedule your personalized demo