This post from American Banker summarizes a strategic investment by both Citi and PNC in the fintech HighRadius, which is a 2007 startup based in Houston, Texas. The company specializes in cash cycle solutions for corporates, most closely associated with improving receivables management. The specific deal terms are not disclosed nor available at this time.
Mercator did manage to speak with Urvish Vashi, the company’s VP of Global Marketing. The company’s primary market is corporations, but Mr. Vashi indicated that HighRadius is building on momentum from a 2017 deal with Bank of America Merrill Lynch to use AI capabilities in to streamline receivables for corporate clients. So although no details are available about the financial terms of this investment, the expectation is that both Citi and PNC corporate banking businesses will utilize HighRadius’ cloud solution for cash applications, another step in their expanding into the bank resell sales channel.
“The problem HighRadius is tackling is a huge problem in the industry,” said Luis Valdich, managing director of venture investing at Citi Ventures. “The combination of paper-based processes and the fragmentation of payments mechanisms used makes for a very complex environment.”
Mercator has highlighted the continuing emphasis on digitizing the cash cycle as a key initiative for banks to provide their corporate constituents in our complimentary 2018 Outlook document for commercial and enterprise payments. Indeed during the past 18 months there have been numerous partnerships announced between fintechs, networks, and financial institutions, many of which have been around payments efficiency, with particular emphasis on small and middle market corporates. We expect this to continue.
“The rapidly growing rate of electronic payments, including same-day ACH and virtual cards, means that commercial customers are looking for new capabilities from their banks beyond traditional lockbox services,” said Sashi Narahari, founder and CEO of HighRadius. “With this higher rate of electronic payments, there is an equally daunting growth in the need to reconcile those payments with a broader array of remittance formats coming from payers.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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