Ditching Paper: Better Automation, Less Fraud, Tighter

Speaker 0: The Payments Podcast from Bottomline. Owen McDonald (Host): Welcome to the Paymode edition of The Payments Podcast. I'm Bottomline’s managing editor, Owen McDonald. It's a special series of payment-themed podcasts hosted by Paul McMeekin, vice president of marketing [for Paymode] at Bottomline. He explores the hottest trends in B2B payments with expert guests. In this episode, Paul welcomes Michelle Pasquerillo, vice president, head of channel strategy [for Paymode] at Bottomline. They look at AP automation, payments fraud, and banks seeking a more collaborative and technology -riven approach to partnerships. Here's Paul McMeekin and Michelle Pasquerillo. Paul McMeekin (Co-host): Okay. Welcome to this Paymode edition of The Payments Podcast. I am delighted to have Michelle Pasquerillo join me. Michelle, welcome. Michelle Pasquerillo: Yes. And thank you, Paul, for having me today. Paul McMeekin: Could you explain to our audience what your role is at Bottomline? Michelle Pasquerillo: So as Paul mentioned, my name is Michelle Pasquarello. I lead our bank channel strategy team, supporting our current bank partners that utilize the Paymode solution. Paul McMeekin: Great, thanks, Michelle. So, you work with some of the biggest banks in the world, and I have a bit of a bit of a two-part question for you: - Firstly, what are the biggest challenges? Why are they seeking to join Paymode or grow their customer base on Paymode? - And part B of my question, what challenges do their customers face? Michelle Pasquerillo: Yeah. So, we have some of the largest banks in the world that utilize the Paymode solution to help support their clients to automate their AP processes. And they largely choose Paymode to offer the solution, the AP automation solution, to their clients because Paymode has a proven track record of helping customers improve operational efficiencies, reduce fraud, and streamline AP processes, for their customer base. We have a strong reputation in the market of providing value to not only the bank partners that we work with, but also their clients and ensuring that their AP processes are protected from the bad guys. And we're making the lives of their AP teams better and more operationally efficient. Paul McMeekin: So, if I play it back to you, the reason why banks stay and grow with us is down to a proven track record of creating value for the end customer. Michelle Pasquerillo: Yep. And to go into your second question, our bank partners and their clients have some challenges today that they face on a day-to-day basis with their accounts payable (AP) processes. Some of the biggest challenges in managing AP include the impact to cash flow, as I mentioned earlier - the impact to operational efficiencies, and potentially the overall impact to the financial health of their organization. In speaking with banks and their clients, one of the biggest challenges that they face every single day is protecting their cash flow and funds from the bad actor. Fraud is on the rise and it's not slowing down. AP departments are targets and very vulnerable to fraudulent activities, whether it's invoice fraud, business email compromise (BEC), phishing attempts, or just the fake vendor, imposter syndrome that we see every day. And it can result in significant financial losses and reputational damages to an organization. So, lack of automation for invoice or check payments, [the] lack of bank account company validation procedures that are in place, all put a company at risk for more increased fraudulent activity. And, unfortunately, we hear from many organizations after the fact - when fraud has hit them and they've lost thousands, if not millions, of dollars from this event that they want to talk to us. But, sadly, it's a little bit too late. So that's the number one reason. There's a lot of other/main drivers. Today, they have lack of automation: there's so many manual processes, there's the dreaded word paper. So where there's just checks, and manual paper checks, paper invoices. And that is just prone to human error, which can lead to inefficiencies. It can lead to payment delays, and, unfortunately, it can inhibit the supplier relationship as well when payments are not processed either timely or are missing in the mail. Paul McMeekin: So, it's a wild world of paper, which is not good whether it's check or invoices. Okay, so moving on. You have been at Bottomline probably longer than you care to admit, and you've worked for a bank previously. What trends are you seeing in how banks approach partnerships and technology adoption? And how has that shifted over the years? Is it easier? Is it harder? What's going on there? Michelle Pasquerillo: So, as you mentioned, I have worked for Bottomline for many years. And when I started here at Bottomline, we had a payment vendor network of only 30,000 vendors. And now today, we're over 550,000 vendors, which means that there's been a large adoption in AP automation over the past 15 plus years. And what we're seeing is that banks are increasingly focused on driving a more collaborative and technology-driven approach to partnerships versus competing with them now. So, banks used to want to build this build AP automation solutions in house. They wanted to manage it. They wanted to own it. They wanted to have that direct relationship with the client for the solutions that they have. And they've realized over the years that although they're large and they have so many great capabilities and skills, they realize in order to go to market quicker with advanced state-of-the-art technology, they need to partner with fast-paced, agile, innovative, fintechs that have the expertise and the focus on the technology, to offer their clients. And then they don't have to build this in-house, which, for a bank could take years to build, is costly, and very time-consuming. So, we've seen the shift where, to summarize, where banks are no longer building this in-house. They're no longer trying to compete with fintechs. They're trying to partner with fintechs that have the technology that they need to stay innovative, to stay agile, go to market quicker, and provide their customers with the best customer experience. Paul McMeekin: Okay. So, it's about letting banks and fintechs focus on their own specialties and providing overall value. So, when you're partnering with a bank, and these are big, big organizations, how do you align for mutual success? And so, for example, when we're launching a new bank, what are some of the common KPIs we look at, and how does that growth path get decided? Michelle Pasquerillo: I think one of the main things and in my mind, kind of at the top of the list, when we look at building a successful partnership with a bank is establishing a trusting collaborative relationship. Banks need to trust the partners that they work with, and you need to showcase that trust. They can't just take your word for it. You have to showcase the trust in your actions that you take at the onset of implementing the solution, but also - most importantly - as you maintain the solution over the years. And also, not everything is sunshine and rainbows. Right? Like, things are going to happen. But it's how these fintechs and third parties react to these events that builds more trust and more reliability. And so, in my mind, you know, building a successful partnership is really based off of trust. Paul McMeekin: And that's probably a lot of regular cadence check ins at both operational and executive level. Right? So multilevel buy-in is essential. Michelle Pasquerillo: With all of our bank partners, we aim to have quarterly steering committee meetings or quarterly business reviews with their executive leadership team, as well as the senior leadership group, and the folks that are doing the day-to-day work. We also make sure that we have regular weekly cadences with all of the product owners to ensure that we are providing the needs to their customers as well as - so building out the solution to meet their customers' needs and stay competitive within the market. And then it's really important that we provide reporting on a monthly basis that showcases how we're doing - not only for their customers, but also for their customers, suppliers, and vendors. You know, I always say that it starts at the vendor level. We need to ensure that we're treating the banks, with the best of our ability, that their clients are taken care of, but most importantly, their suppliers are taken care of because the suppliers are the front line. They're the ones receiving the payments. They're the ones with all the inquiries. And if we're not responding timely to their suppliers, if we're not providing accurate information, or if we're impacting the service that they are used to receiving, they're going to escalate that up to their client, the bank client, and then that's going to get to the bank partnership. So, it's really having KPIs and reporting at all those different levels: at the supplier level, the client level, as well as the bank partner level, and ensuring or meeting those needs. Paul McMeekin: Okay. One last question, Michelle. If you could give one piece of advice to CFOs, treasurers, or people involved in payments at either companies or banks about the future of payments, what would that be? Michelle Pasquerillo: So, my one piece of advice to CFOs and treasurers about the future of payments would be to protect your team, protect your customers, and protect your reputation from fraud. Which means you need to embrace digital payments and automation, as a strategic priority, to reduce risk, to avoid fraud attempts, to optimize your cash flow, and enhance operational efficiencies for, not only happier employees, but also for happier suppliers and clients, and focus on strategic revenue initiatives. Your reputation is important. Your employees are important. And your clients are important. And by digitizing your AP team and your payment methods, that will help ditch the paper and move digital on all aspects, invoice and payments. Paul McMeekin: Excellent. And thank you again for joining us today, Michelle. Really enjoyed having you on the show. Michelle Pasquerillo: Thank you, Paul. Owen McDonal: The trust economy and banking. Financial organizations playing to their strengths through payment partnerships. Beating the other cost of B2B fraud, which is reputational harm. All good to know. Thanks to Michelle Pasquerillo, vice president, head of bank channel strategy at Bottomline, and to co-host Paul McMeekin. To our great, great audience, thanks for listening. Hit subscribe. Catch us again on your favorite podcast platforms, including Apple and Spotify. Bye for now.

Speaker 0: The Payments Podcast from Bottomline.