Electronic Accounts Payable (AP) payments can be a win-win solution for all, including banks, banking customers—and even outsourced IT vendors! Writing paper checks is a skill that’s dwindling. Ask a young millennial or teen how to properly fill out a check, and they may not even know. It’s no surprise that we’re veering sharply towards a fintech world where everything is done electronically, but what is surprising is just who the key players are.
If you can’t remember the last time you wrote a check to a utility company, to a vendor if you own a small business, or for your rent or mortgage, you likely depend on AP payments. They’re especially common if you have a recurring payment. Simultaneously, an increasing number of people and small business owners are relying on smaller, mid-sized banks and community credit unions to take care of their banking needs. A more personal touch, local branches, and perhaps extra perks make these types of financial institutions a great fit for many.
But is your bank really the only one who’s providing your fintech services?
Fintech and the New Face of Outsourcing
Fintech is just what it sounds like: The marrying of finance and technology. You’d be hard pressed to find a bank who didn’t have a generous amount of fintech in the mix. However, asking any one person or even department to be a truly balanced fintech machine in the banking world is like wishing for a unicorn. Finance and technology have a lot of overlap, but they are still two very different beasts. The odds of a small or mid-sized bank being able to bring on a top tier fintech team in addition to all the finance pros they already have on board just isn’t realistic.
That’s when outsourcing happens, but don’t worry. It’s not like it used to be. The term “outsourcing” still leaves a sour taste in a lot of people’s mouths because they imagine the stereotyped, overseas, un-trained workers who are supposed to be representing your company but end up providing poor service and frustrating customers.
The Digital Era and a global economy has ushered in a new age of outsourcing. Unless you’re a major company (or a major bank), it’s simply unrealistic to get top of the line employees and departments for every single need. Using the latest technology, which requires premium workers to manage this technology, requires companies to have many more departments and workers, too. For instance, fintech and martech are very new job titles and departments that didn’t exist just a few years ago.
How Your Banks Outsource
Smaller banks utilize outsourcing solutions for a number of needs including AP payments because it’s what’s best for everyone. Your bank might outsource the electronic AP payments to a reputable, secure and proven outsourcing company to take care of that aspect of fintech. It’s not a secret by any means, but it’s unlikely that your bank will advertise this particular outsourcing solution. However, if you ask who manages their electronic AP payments, they should be happy to tell you. If you’d like, you can then research the outsourcing company yourself, but you can rest easy that any financial institution will have undertaken extensive research to make sure they choose the best possible outsourcing company for their fintech needs—and their customers.
Without outsourcing, your bank would likely need to create a brand new department, hire new workers, train them, perhaps expand overhead, and that costly expenditure would trickle down to you. Outsourcing fintech needs (or most tech needs in general!) is often a means of not just saving money and passing those savings onto customers, but ensuring the best possible technology, skilled workers, and security is utilized.