3 key takeaways from this session:
- Business challenges that SMBs are currently facing and their expectations of service from their bank partners, where banks are falling short.
- The threat that fintechs present to bankers, what fintechs are doing better, how fintechs are more in tune with the needs of SMBs and how bankers can best counter this.
- Elements of a modern business banking card program: user experience, rewards and loyalty, data and reporting, card controls, positive direct impact on SMBs' business.
Jackie Tool (00:09):
I am Jackie Tool. I lead the card and payments practice for NTT Data, and we are the sponsor for this track and I appreciate you all joining. I'm going to hand it over to into the ready hands of the panel team to introduce each other, but thank you for joining and on behalf of NTT, Thanks.
Betsy Vavrin (00:28):
Well welcome. Good afternoon. Thank you so much for joining us today. We have a great panel and they have extensive experience with valuable information to share with you today about the SMB card experience. And my name is Betsy Vavrin and I am President and Founder of SMC Marketing. For over 25 years, we have been working with our bank and credit card and FI clients to develop customer relationships and enhance the customer experience as well as in increased profitability. My company's done a lot of work with card companies. We have designed and implemented and managed programs with Citi Cards and Discover Cards and American Express and Wells Fargo cards as well. Currently, we are working with our bank clients who've asked us to design programs for small businesses owned by women in diverse small businesses and add to their functioning and capability in working with small businesses and providing the kind of resources that they need to survive and especially to succeed.So without further ado, I'd like to introduce our panel today. We have as I said, a panel, both very experienced CEOs and Founders, and to my left is Rasha Katabi with Brim Financial. And to her left is Kim Fitzsimmons and she's CEO of Talus Pay and she is also honored this morning as Women in Payments honoree. So I want to welcome everyone here and welcome them to the panel today. I want to turn this over to them after they've had a chance to introduce themselves and tell you a little bit more about what they're doing to help small businesses, and especially how their company's solution expects it impacts the user experience. First of all, how are each of you and your respective companies responding to the needs and the challenges of small businesses?
Kim Fitzsimmons (02:47):
So I know the title, and we talked about this on our initial card call was about card. I actually have 35 years in the acquiring and the payment side. So Rasha and I are going to balance this with the card and the payments on both side of the transaction. As far as Talus pays concerned, we're a service provider, have a number of financial institutions as our clients. There's two different methods that we partner with our banks. They either go out and do all of the selling and reselling of our services themselves and we support, or it's more of an integrated partnership. We align with treasury management, commercial bankers within the financial institution. And I can certainly give pros and cons for my vantage porch on that later.
Rasha Katabi (03:40):
Yes, and this is from the acquiring side. Bri really focuses on the issuing side. We partner with banks, credit unions, really across the FI space in order to enable them to really leapfrog the competition and compete effectively by rolling out a product and a platform and a full ecosystem that enables them to provide innovative, strong value proposition products for their SMBs as well as their consumers and their commercial really in end-to-end suite as well as the enterprise workload platform because it's good to launch a product, but in reality you're launching a business. So when you're launching a business around this product, there's the entire ecosystem of running this business, enabling the business, cross-selling this business, reporting on its money movement, et cetera. So, Brim really is a fully integrated platform that enables you to launch re-platform, repatriate that credit card space from consumer to SMB to commercial.
Betsy Vavrin (04:57):
Well though we have, as I said, we have some real experts on our panel today, and when we're talking about the small business customer and especially with the challenges that they're facing right now, how are your solutions helping them with regards to their revenue stream, both on the payment side and on the receivable side?
Rasha Katabi (05:23):
Sure, I can take that. So small businesses have a strong banking relationship with their community banks. As a result, it would make a whole lot of sense for them to be able to leverage product and services and platforms that are tied to where they may have lending, where they may have commercial loans, et cetera. Generally speaking, the banks, their banks in this ecosystem are lagging the competition in terms of if you look at a bricks or a ramp or other fintechs or large banks like JP Morgan Chase, et cetera, what they offer in that space. So by enabling all of the banks that deal with SMB across the spectrum, it's super important not to go to a fully concentrated model in banking, but to democratize this access to very strong services and products that enable you to make money within your community and your ecosystem dealing with your basically local bank. Whether that local bank is a regional, super-regional or is a community bank or accredit.
Kim Fitzsimmons (06:38):
Yeah, I would say take it from two different angles. So as far as helping the small business, one of the things that our company provides is low cost. So number one, and number two, highest expense line items for any small business is usually human capital and the cost of card acceptance, and it's interchangeable, which is first. So what we try to do is help drive down their cost of acceptance, either through technology, other forms of payment, including things like surcharging, cash discounting. There's a lot of buzz around that. And then finally, from the bank side of it, I did spend five and a half years at JP Morgan Chase. One of the things that you'll see from the big banks is that they acquire, So JP Morgan went and acquired, we pay to be able to compete with the squares and stripes of the world, so they buy the technology.So it's really a matter of how do you know other financial institutions that aren't acquiring or aren't, and they have space to acquire? How do you partner and really truly embed payments into accounts receivable, right? And how do you help that small business once you take their receivable? And it's tough sometimes for treasurers to think about it that believe it or not, payments is usually one of the largest receivables that these small businesses have. So how do you help them take that receivable and help them with their cash management tied into all the treasury products?
Betsy Vavrin (08:11):
Those are great examples. Where do you think banks are falling short in terms of helping this small business customer? That's a big question.
Kim Fitzsimmons (08:20):
Yeah, so I heard one of the questions, last questions from the last session was around the technology, you know, have these embedded and ingre ingrained payments and how do you service them as a financial institution? It's really difficult. This is all we do as a company, and we can't be experts at everything. We even still have to pick and choose. And I think a lot of times where banks fall short is that they, it's your customer, and so you want to be that front and center face to the small business, but you fall short on service because it really is, payments is a very, very complicated fast moving product.
Rasha Katabi (09:07):
And the way we solve that from an issuing perspective is that we embed fully our technology within our bank partners ecosystem. So what I mean by that is that whether it's on their digital footprint, so it's within their URLs, it's within their websites, it's integrated in SSO. So when their end users, whether that's a consumer or a small business or a commercial are blogging into their banking platform, they're going into all of the sub platforms and services and products and interfaces that Brim rolls out within the environment of our bank partners. And that's just the digital aspect. But we do still live in the physical world. So there's branch networks out there, and I think one of the major drawbacks of technology solutions is do they account appropriately for the importance of the support, the origination funnel as well as the cross set that happens in branches and within the community. So we don't believe you can run a successful business if you have your branch network being blind to what is that product that you're launching in the rest of your ecosystem. So what Brim does is that it rolls out a mirror complete enabling platform in the branch space, and we call it the branch portals where your employees are logging onto their internet and logging on, and literally they're co browsing or enabling origination or cross-selling or servicing lifecycle that SMB or that commercial or that consumer. So now you have a full bank strategy that is both digital and physical.
Betsy Vavrin (11:01):
Totally Integrated.
Rasha Katabi (11:02):
It's totally integrated, and as well as in the call centers because you're going to have that same customer or a new one calling into your call centers. And if these three channels are converging in real time, you're going to have challenges.
Kim Fitzsimmons (11:17):
And at the end of the day, for Brim on the issuing side, it's choosing the right partner. And how do you get that partnership to where whether it's fully embedded, white labeled correct, it is finding that right trusted partner.
Betsy Vavrin (11:31):
That's great. We've talked a little bit about this, but the cash flow issues that small businesses are in, typically, how do your solutions help them? Are there ways in which you can help their cash flow?
Kim Fitzsimmons (11:50):
So I'll take that one first because it's probably you. We don't like that is our bank partners line of business and we don't cross over. So if a small business is needing some type of loan or funding, we send them right back to the bank partner so we're not crossing.
Betsy Vavrin (12:06):
Tell us a little bit more about Talus Payne and what you do and how you do differ from what?
Kim Fitzsimmons (12:13):
So we're on the card acceptance side actually in the environment of the small business so that they can take the cards, whether it be your branded Visa, MasterCard, pin debit, EBT, what have you.
Rasha Katabi (12:28):
When you're going to make a purchase at a store or online.
Kim Fitzsimmons (12:32):
Yeah. Absolutely.
Rasha Katabi (12:34):
Yeah. So from our perspective, your bank is going to be able to help you the more they know about your business. So that ability to have full real time visibility on all of the cash flows as well as the transactions, both sides of the value sheet, et cetera, of that small business, the more this bank is going to have much higher confidence in their ability to help you. If they're putting out, for example, a loan for you that is a revolving line, but they know how you're spending it within your company, they're going to be a whole lot more comfortable from a risk management perspective to increase these lines. If they're going to see everything that's happening on acceptance, the more they have visibility, the more it is in the real time, the more they're going to be able to give you an advance on your dollar, et cetera. So it becomes extremely important that this technology is not only there from a bank perspective and risk management and what not, but it is that same risk management aspect that enables the bank to be more bold and that risk taking you.
Betsy Vavrin (13:46):
Has there been any issues, I mean this is a big issue overall to businesses and to consumers right now, is broad, what kind of issues have you seen with your different companies and how you're approaching those?
Kim Fitzsimmons (14:08):
The fraudsters are always going to be one step ahead. It's what they do. So we actually just in the last six months, brought in an external cyber team to hack us. So we're constantly trying to see if we have vulnerabilities because we have a lot of PI and a lot of cardholder information, so we're trying to get ahead of things. Yeah, I mean it's a constant battle to keep things locked down and secure.
Rasha Katabi (14:43):
Yeah, I think you're going to see that as the theme really out there. I know that as the entire economy, not just guys turn digitals of course.
Betsy Vavrin (14:54):
What other kind of challenges are you seeing from small businesses right now and how are your solutions helping them with those challenges?
Rasha Katabi (15:03):
So from a card platform workflow platform, because we're also enterprise workflow platforms, that ability giving that small business, the ability to manage actively all aspects of their spending, whether they are a two or three people company when they're growing two 50, when they're growing to 70, when they have departments and budgeting and what not, all of that together with their payment methods and channels and then enable them to be well serviced by their bank, it really is, we're always sitting in between those two aspects. So the strength of the platforms that are presented as the ecosystem where that SMB is running their business as well as where that banker is banking this SMB business, and both these, it's this two sides that Brim delivers the end user, whether it's an SMB or a commercial or a consumer ecosystem as well as the FI's enterprise workflow.
Kim Fitzsimmons (16:09):
Yeah, I think from our perspective on the acceptance side, it's ensuring that we've got everything that will serve a small business. And then as they continue to grow, both in the physical world, online, mobile, now we offer embedded payment solutions for different verticals and really everything in between.
Betsy Vavrin (16:33):
How do you see yourselves as helping small businesses drive their growth? And as you said, you're very integrated into what they're doing. Yeah. Where do you see some of capabilities?
Kim Fitzsimmons (16:47):
For us, it's knowing their customer, right? So the intelligence on who is their customer, where are they coming from, where are they, what zip codes, when are their busiest times, using some of that data intelligence and then helping them with marketing. So, search engine optimization, working with Google, et cetera, so we can help position that.
Betsy Vavrin (17:12):
So you are involved in those types of things.
Kim Fitzsimmons (17:15):
Yes.
Betsy Vavrin (17:16):
Thats a very integrated with the small business customer. It is Talk about improving the customer experience. So, when they're working with you, they know they can count on you for so much more.
Kim Fitzsimmons (17:27):
Absolutely. It's just like a financial institution or any business. The more products you can offer and serve your customer, whoever that might be, the better retention and yeah, deeper relationship you have. So yes.
Betsy Vavrin (17:43):
Rasha, did you have something?
Rasha Katabi (17:45):
Yeah, completely. So I completely agree. Do similarly from our perspective effectively in order to provide them with data intelligence. One more thing though that we do at Brim, because from an issuance perspective, the rewards and loyalty ecosystem is such a integral part to the issuance side of the equation. We built at Brim a real-time rewards ecosystem, both from the urn and from the regime that you know can configure from a merchant perspective. So you're not telling the merchant what is good for their business, but you can have a merchant driven rewards algorithms that are configured within three minutes and then those offers are live within the Brim ecosystem platform. What does that really mean? It means if we are the platform for 20 banks, then you have the opportunity to launch these rewards for the customers of these 20 banks. So now just think about the amplification of the reach. And those rewards are really funded and designed by the merchant for the merchant. So it's an infinite return on it because they're not paying anything for this ecosystem unless they have a transaction that is completed. So if they decide that it makes sense for them to put out 2% or 3% or 4%, for example, we have Apple at three and a half percent and then they turbo it up for the back to school and for Fathers Day to five. And my question to their marketing folks was for how long do you guys want to run it? Their answer was that ad nauseum because they said that laptop, if you're taking your same credit card from whatever bank Brim is platforming and they're buying the same laptop at Best Buy, apple is leaving 13% at Best Buy. So if Apple is offering 5% to disrupt this motion and have the end consumer or SMB for their business buy directly then from Apple because they're going to get 5% rewards, that's the win. They just saved 8%. So it's very real. It's a win win all across. It's a win for the merchant, it's the win for an end user. It's certainly a win for the bank that for this transaction didn't have to fund the base rewards on this transaction because they are in real time. So they completely replace each other, Betsy. So this is where technology complain well, very additives.
Kim Fitzsimmons (20:29):
That's a great example though of really how complex payments can be on both ends of the equation, not just from technology, but just the knowledge of all the things that are happening with Apple and Amazon, et cetera, that are changing the market. So it's finding the right partner that you really trust most. We talk about small businesses, but most financial institutions, again, it's tough to keep up with all of it on the issuing and the acquiring side.
Betsy Vavrin (20:59):
Well, I wanted to give the audience a chance to ask some questions. Megan, did you have, I don't know if there's anybody who wants to ask me questions. And we have a great panel here with terrific expertise as you can hear. Anything else that I've missed in terms of the things that we wanted to discuss today? I do have a question with regards to and whether or not this is even an aspect of what you're working with embedded finance and how that's involves the small businesses in helping them. Anyone want to address that?
Kim Fitzsimmons (21:43):
So I am the furthest thing from a technologist. In fact, my CTO laughs at me when I talk about an API, meaning pretty much cut and paste because that's what it means to me. But I think with the whole API in the sandboxes, everything is embedded. If you think about how we as consumers ourselves want to interact, it's going to become more and more embedded. Everything is so banking as a service and financing as a service, it's all going to be in the palm of our hands point and click QR codes. I think it's just going to happen faster and faster and it's going to be multiple products converging.
Rasha Katabi (22:33):
Let me give you an example. It's a large merchant, but just to illustrate the embedded aspect. So Air France Scale, we launched for them from an issuing perspective, a credit card program that's well understood, but the various layers that actually is where they can increase their footprint, their origination funnel, as well as transactions that are done on their cards. We are just rolling out Apply and Fly. So Apply and Fly is where someone is going to actually go and buy a KLM ticket or an Air France ticket with a credit card that they have in hand. But right now they're seeing an offer within that purchasing of the ticket before they go and they hit submit pay, et cetera, where there's an opportunity to get a credit card and to actually capture this transaction and then start off purchase.
Kim Fitzsimmons (23:33):
An immediate discount on that purchase.
Rasha Katabi (23:35):
Exactly. And, that's just one example from that have an automatic. And that's an automatic reward. And then now you actually kicked off that entire relationship, et cetera. Imagine you're doing that. They have Flying Blue, which is one of their large, the largest reward footprints globally in airline and travel. Now we're doing that with their major merchant partners within the flying ecosystem. So you can see how harnessing the strength of their merchant ecosystem into an origination funnel very much.
Betsy Vavrin (24:13):
That's really enhancing the customer experience. Yeah, that's a great example. Thank you.
Kim Fitzsimmons (24:22):
We're standing between everybody.
Betsy Vavrin (24:23):
In cocktails.
Kim Fitzsimmons (24:28):
So I state the obvious.
Betsy Vavrin (24:31):
Yes, I think we've pretty much covered, unless anyone has any other questions. Yes.
Audience Member 1 (24:37):
Question, But I know you touched on, but your organizations, how do you find yourself partnering?
Rasha Katabi (24:59):
From a bank perspective? Okay, so from Brim's perspective, because we're on the issuing side, we focus very much on the platform and credit card platform as a service. Actually, if I may, we were ranked first globally by IT Nuva as credit card customer as a services this last October. We're very excited about that. Yes. So basically we run it into their ecosystem and whether it is because of a modernization initiative that's going on at the bank or modernization slash replatforming, and that modernization means maybe you want to modernize the platforms that you currently have or you also have commercial lending and SMB, but you do not have card products to go with this commercial lending activity that you have. So now you can actually harness more of this value of the customer and service them better and have a security relationship. So that's very much something that we are hand in hand and we don't compete with our bank partners. We are very much their platform enabling partner.
Kim Fitzsimmons (26:10):
And as far as we're concerned we'd like to consider ourselves platform agnostic. So we sit in the middle and try to take the complexity out of dealing with a Pfizer or a global or FIS. So kind of bringing it all together as a hub.
Betsy Vavrin (26:29):
Well, I want to thank The American Banker and particularly the panel here today, Kim and Rasha. It's really been a pleasure working with you. I want to thank Stephanie for all of her help and organizing and prepping us and making this session possible. Thank you for attending and I hope you enjoyed him as much as we did.
Rasha Katabi (26:48):
Thank you.
Kim Fitzsimmons (26:48):
Thank you.