Financial news

SunTec Business Solutions, the pricing and billing company, in association with Arizent Research and AmericanBanker, has released a whitepaper titled It’s time to reinvent account analysis.

As per the study, conducted between December 2022 and January 2023, US banks are struggling to effectively meet the needs of their commercial clients. Ninety-seven per cent of banks are looking at addressing market pressures to improve corporate banking services. A few examples include pricing for corporate banking services, monetising API connections, and offering BaaS solutions.

According to the whitepaper, six-in-10 banks see account analysis as merely a billing statement, severely underestimating its possibilities. Sixty per cent of banks cite real-time account balance information as a crucial service to corporate customers. Meanwhile, only 41 per cent of them fully meet client needs in this regard. This finding underlines the challenge that corporate banking customers face and those that banks are addressing.

Other key findings from the survey include:

• Nearly half (49 per cent) see error-free billing as an important essential service. However, only 41 per cent deliver fully on it.
• Accurate cash flow forecasting was deemed necessary by 49 per cent.
• Fourty-six per cent mentioned transparency being of importance to them.
• Nearly half (46 per cent) don’t necessarily even see their current account analysis process as antiquated.

The survey calls out ways in which banks are managing evolving market demands:

• Forty-seven per cent are adjusting pricing for corporate banking services to be more competitive.
• Forty-six per cent are offering Green-ECR/Carbon offset/ESG features to account analysis.
• Forty-five per cent are enhancing their account analysis statement presentation.

One option that could help banks substantially improve their corporate offerings may well be flying under the radar. Nearly half (45 per cent) of banks agree that their account analysis function is frustrating for corporate users.

Those in operations roles—who encounter commercial users on a regular basis—are substantially more likely (68 per cent) to see account analysis as frustrating to clients. Especially when compared to those in sales (33 per cent) or product (29 per cent) roles. Nevertheless, the account analysis function has not been a particularly high priority for banks’ modernisation efforts. More than one-in-three banks say modernisation of account analysis lags their other processes.

Unlocking more opportunities

The report also calls out the key benefits of having a connected and efficient account analysis process and how it would unlock a range of opportunities for commercial banks:

• Controlling revenue leakage at onboarding and renewal
• Ensuring efficient partner ecosystem management
• Access to single account with virtual sub-ledgers
• Offering hybrid interest accounts

Commenting on the findings, Nanda Kumar, founder and CEO, SunTec said: “Account analysis cannot be overlooked as just a pedestrian billing or reporting solution. It holds significant strategic importance and value for the banking industry. Especially as corporate treasury teams seek better ways to manage cash across multiple banks and jurisdictions. Through this report, we highlight the possibilities available for banking simply by modernising account analysis.”

The survey covered 100 business banking professionals, which brought forward insights that can benefit commercial banks and their customers. Through these insights, the opportunities associated with account analysis unlock a range of opportunities for commercial banks—and given the extent to which the process has languished, more are likely to arise as banks finally discover the benefits of upgrading.