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Small Business Payments Company seeks to partner with banks to provide better online tools to small business owners, an area that's been ripe for disruption for years. The product forecasts companies' cash flow, which gives rise to more cross-sale opportunities for banks.
December 20 -
Bill.com has updated its platform through which banks can resell the company's bill payment, invoicing and cash flow management services to their small-business customers.
November 6 -
Since Apple released the iPhone in 2007, mobile banking apps for retail banking customers have become a must have. Yet, one customer type has been neglected in the app stores: small business owners.
July 18 -
Easier login and integration of a Bill.com cash management dashboard with online banking is designed to lighten the online cash management learning curve for businesses that may be on the fence.
May 1
One of the largest U.S. banks is expanding the digital tools it offers small businesses, a customer category whose needs are attracting the attention of a flurry of software developers.
PNC Bank, the sixth-largest bank by assets, announced Monday a partnership with Bill.com. The relationship has allowed the Pittsburgh bank to expand its tech offerings for small businesses to help them manage their cash flow management, in the hopes of deepening customer relationships and gaining fee income.
The announcement comes at a time when many banks are rethinking the way they serve small business clients. Industry analysts have identified the small business category as ripe for innovation, and suggest banks that create customized digital tools such as cash flow forecasting can better serve customers and decrease the risk of disintermediation from startups like Square and InDinero.
"Now is the time for banks to begin addressing their vulnerabilities in the small-business space," says Christine Barry, research director with Aite Group and author of a 2013 report on small-business banking,
Bill.com, founded in 2006 in Palo Alto, Calif. as CashView, ties together finance and accounting programs, banks, customers, vendors, accounting professionals, and documents to automate small business' financial tasks, including handling payments.
"Cash flow is the life blood of all small businesses," says Tom Kunz, senior vice president and director of payments and e-Business for The PNC Financial Services Group, PNC Bank's parent company. "Most small business owners aren't finance professionals. Knowing their cash flow isn't intuitive or easy for them."
PNC's existing suite of digital tools, called
PNC's partnership with Bill.com expands what Cash Flow Insight, launched in April 2013, lets customers do. The service served as a place to forecast cash flow based on small businesses' bank data, such as bill payments. Now, the suite includes digital invoicing capabilities and the ability to sync in data from popular accounting software like QuickBooks. The combined tools now let small business clients pay bills, manage contracts and receipts online, generate reports, and model their cash flow three ways: a shorter-term (90-day) view, an 18-month model and what-if scenarios of the user's choosing.
"To have all that [data] in real-time with a bank is what we think customers are after," says Kunz. Other cash-flow software products available for this market don't integrate with bank accounts, Kunz says.
PNC does not disclose its small business customer count. The updated tools, however, have been live with some customers for 30 days, Kunz says.
The enrollment is a one-click process for online banking customers. Then, of course, a business owner needs to enter data about vendors and other aspects of his business, to get a more accurate forecast. In turn, the length of the set-up process will depend on each small business' operations. The bank, then, gets access to a treasure trove of data and potentially more logins and more dedicated customers.
PNC used APIs from the Bill.com business payment network to integrate the service with existing tools.
PNC is the first large bank to announce offering the services.
To be sure, every small business is different and the features they will want or need to use will vary.
Unlike retail customers, small businesses are more likely to
The software's advantages for the end-user are positioned as time savings and a single place to manage money. Most invoicing customers are using simple software, such as Microsoft Word, to send out bills and a separate payment provider to collect, which requires double data entry, says Kunz. "It makes it easy for the small business owner to understand cash flow," he says.
Users can set up alerts and calculate what-if scenarios, too.
Historically, banks' digital tools have ignored small businesses. In some cases, banks don't understand the small business customer.
That's changing.
The emerging technology is a direct shot at digitizing process for an audience pressed for time and that has yet to warm up to digital banking services the way retail customers have taken to them.
"Business owners are challenged with juggling numerous responsibilities, so finding time to focus on strategy and grow their business is more valuable than spending time on spreadsheets, payments, and forecasting," says John Schulte, senior vice president and chief information officer of Mercantile Bank of Michigan.
Translation: Expect more features to be integrated into banks' online banking platforms soon.
"We are at early stages of a secular trend of small businesses customers becoming more automated," says PNC's Kunz.
