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For the past few years, it has become more challenging for bankers to compete for traditional receivables and treasury management business. The financial services industry has been rapidly moving towards the electronification of payments and the truncation of paper checks early in the payments process. This strategic shift to electronic payments has placed a premium on consistently delivering all the new payment mechanisms that improve cash flow and availability of funds.
Today's bankers and treasury managers must find new and innovative ways to compete and remain profitable in such a highly competitive environment.
Traditionally, wholesale banking and treasury management has been a place where the road to innovation is blocked by numerous barriers: IT, corporate culture, operational limitations, and more. But there is an opportunity to break from the past by moving to cost-efficient nextgeneration delivery models and new emerging receivables products that target high-growth markets.
A New Approach
Optimizing receivables management requires a new approach. Businesses and their financial institutions must find an alternate way to facilitate the receipt of payments, streamline information capture, improve cash flow, meet regulatory compliance, and enhance service.
Don't assume, however, that the old tactics of lockbox outsourcing will work here. The rules have changed. Offering a bare bones lockbox service to businesses is not a sound approach in competitive markets. Implementing an in-house lockbox system is too costly for small-andmedium size banks. And a robust payments processing infrastructure is impractical for many businesses.
What is the Solution?
Certain banks are choosing to leverage ASP or software-as-a-service based receivables solutions. By utilizing a hosted or managed receivables service, banks can speed and ease implementation, achieve global deployment with minimal investment, and extend the range of receivables applications they deliver to corporate and commercial clients (what is the difference between "corporate" and "commercial?" Best of all, banks can offload the cost, complexity and headaches of managing a lockbox operation to a proven strategic provider.
The Way Forward
For a hint of where ASP-based receivables outsourcing is headed, look no further than to its pioneer. Metavante Image Solutions, a unit of Metavante (NYSE: MV), is expanding its product line with the introduction of RemitPoint - a hosted receivables processing solution. RemitPoint is a direct product extension based upon Metavante's RemitEnterprise...