It’s not that this isn’t new since there are announcements every day in the hyperactive B2B space, but partnerships between banks and fintechs have been accelerating for a couple of years now and we are starting to see some results from the various collaborations, investments, and so forth.
This piece in Payments Source discusses some of that vis-à-vis JP Morgan Chase and a couple of fintechs called FI Span (a 2016 startup out of Vancouver) and Trovata (another 2016 startup out of San Diego), who specialize in API integrations for cash management and other bank product efficiencies.
We most recently pointed out this ongoing reality in a research piece that underscored the necessity of this type of collaboration, otherwise competitive disadvantages will surely undermine future bank growth.
‘JPMorgan Chase’s goal is to enable payments and other business services without repeated logins to different systems and costly and lengthy technology implementations. The bank’s product is called Treasury Ignition, offering what it calls an “end to end” wholesale payments experience….“It’s an ecosystem play where J.P. Morgan and our fintech partners will deliver banking capabilities in the client’s own Enterprise Resource Planning (ERP) environments,” said Jason Tiede, a managing director at JPMorgan Chase and head of the bank’s innovation team for Wholesale Payments….JPMorgan Chase has built a NetSuite plugin that initially included functionality to enable clients to pay their vendors directly through their ERP. Examples include a list of bills a business wishes to pay, such as invoices and vendor payments – and the payment method, such as ACH, wire or check. A “pay bills” button executes the transaction.’
One of our themes in the CEP service at Mercator is the UX (make things easier for corporate clients), which is facilitated by the growing utilization of APIs, providing simpler and smoother access and uses for latest gen technology solutions.
The article goes on to discuss JPM Coin and the blockchain model for B2B use cases, a key pain point for treasury operations. These and other use cases, such as B2C for contract employees and so forth, can be more easily configured into existing product sets through APIs.
ERPs are one of those critical integration points, but there are many others as well. The multiple collaborations are mentioned, and we see this continuing for some time as the procure-to-pay landscape converges.
‘That’s led technology companies such as Bill.com to add virtual cards to automate accounts payable for small businesses through partnerships with Amex and Mastercard. Another company, Coupa, has brought elements of the “gig economy” to B2B payments by building a suite of transactions and supply chain management under a single payment experience…The benefits of these integrations has created a race among providers, since businesses will want to consolidate treasury management relationships.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group