By Scott Johnson, Head of Product Development, Western Union Business Solutions
Overcome the status quo
A key challenge for all businesses is the continual search for ways to operate more efficiently. Each year budgets tighten and businesses in all manner of industries look for smarter ways to maximise the resources they have on hand.
Financial Institutions are feeling this pressure in a troubled global economy. A recent report from McKinsey & Company claims that more than 50% of Financial Institutions around the world will become economically unviable if hit by another economic downturn1. Faced with this threat many Financial Institutions are challenged to deliver cost savings while customer demands increase among fierce competition from both traditional rivals and ‘digital disruptors’ such as PayPal.
Compounding this, both consumers and businesses are increasingly relying on digital channels to shop and trade around the world. As global markets begin to reopen post COVID-19 research from McKinsey & Company clearly shows that consumers are looking for digital and reduced-contact means of purchasing goods and services2. Financial Institutions must seize the opportunity to service these needs by not only focusing on generating revenue through expanded services, but also striving for operational efficiencies that keep overheads under control.
Envision this for your institution:
- Increased revenue by optimising payment channels
- Decreased the costs associated with intermediary banking networks
- Improved productivity by automating manual international payment processes
- Easy management of payment regulations in multiple jurisdictions
- Increased wallet share through enhanced customer experience.
If any, or all of these are attractive goals it is time to examine your processes. Why stay in a rut when your Financial Institution could easily create operational efficiencies by tweaking the way you manage international payments? Here are 5 ways to streamline international payments and help fast track your institution to the new normal.
1. Channel optimisation and revenue generation
Businesses and individuals are buying and selling goods and services online with increasing frequency, especially as markets adjust to a post-COVID world. If your Institution does not support their needs, you risk them turning to a competitor and ultimately moving their broader banking relationship. At the same time, customers are changing how they want to interact with banks and Financial Institutions. Whilst some customers will continue to demand face-to-face service, the in-branch experience is quickly being superseded by convenient, online access to the full range of banking products.
To remain competitive in this environment it is not only critical that Financial Institutions offer a full international payments service that spans outgoing and incoming transactions. The service must be available within your online banking platform. Today’s customers do their banking outside of business hours while on the move, so your service must be conveniently accessible 24/7 and easy to use. Your brand is important. So, ensure you work with an international payments provider that can white label a payments platform to provide customers with a seamless experience.
2. Minimise process costs
If your customers do not make a huge amount of international payments, you may not receive the pricing you want from correspondent banks. And, every international transaction is susceptible to a range of correspondent banking fees that either you, or your customers end up wearing. Not to mention the costs of maintaining your own foreign bank accounts.
The smoothest way to decrease overheads associated with international payments is to work with a partner that can offer its own global financial network. It helps to minimise the fees attached to a transaction when there are fewer intermediaries involved in its journey, and your team do not have the headache of managing multiple foreign bank accounts. This leads to operational efficiencies achieved all round.
3. Increase staff productivity
As the in-branch banking model evolves post-COVID to run on less resources, financial institutions are facing the need to streamline processes so staff can focus on responding to more complex requests3. Manual and paper-based international payments processes tie up resources and are prone to error, which impacts your reputation and customer experience. Unfortunately, there has been a historic resistance to change among Financial Institutions which has the capacity to erode their competitive position by impacting customer service. This is your chance to take the lead.
When it comes to servicing that section of your customer base who still wants an in-branch experience, help ensure your staff can efficiently fulfil their requests by digitising manual components of international transactions. Give your staff the ability to process foreign payments quickly using an intuitive online payments platform. Not only can you increase their ability to serve more customers and add to your revenue, but this fast and accurate process will also contribute to a climb in customer satisfaction levels.
4. Demystify compliance
International payments have the added complexity of country-specific regulations that must be complied with to avoid penalties, delays and disappointment. Fraud and money laundering are an unfortunate reality that you also want to avoid. A stalled or lost payment can lead to a frustrated customer which tarnishes your reputation and ties up resources in the resolution process.
Give yourself peace of mind by working with a trusted partner that is committed to compliance and highly versed in the most optimal ways to get your get funds where they are needed reliably, on time and in full. Ensure that any international payments partner you work with has a team of experienced compliance professionals based around the world who frequently collaborate with regulators to confirm that frameworks are based on industry standards.
5. Enhance your client experience
In a competitive international market, your success can depend on your ability process international payments quickly, conveniently, and flexibly. Customers expect payments to arrive on time and in full. Some banks and Financial Institutions only focus on major currencies leaving a gap in the market for customers with more specific requirements.
Take complete advantage of the growth international payments can offer by working with a partner that enables a full range of currencies and payment types through only one integration. To increase customer satisfaction further ensure that the online international payments platform allows customers to see in advance exactly how much the payment will cost in their own local currency, minimising the chance of surprise expenses. It also pays to offer your customers the ability to receive payments in their local currencies.
Look and you will find efficiency
This is only a brief snapshot of potential ways to maintain market competitiveness by incorporating operational efficiencies into your international payments service. More than 1000 Financial Institutions around the world trust Western Union Business Solutions to help implement cost-savings, streamline inefficient processes, and increase revenue opportunities through expanded customer services. Don’t just accept the status quo. Invest a small piece of time into reviewing how you manage international payments today and increase operational efficiencies and revenue into the future.
Want to learn more?
Download our guide to partnerships to discover how Financial Institutions can leverage regulatory and technological developments to grow and to operate more efficiently.