Culture and Talent

Inside KeyBank’s partnership strategy

  • Matt Miller, head of product and innovation at KeyBank, talks about vendor and client relationships and keeping up with competition.
  • "We take a relationship-first approach with our clients... we don’t want to show up with a product pitch," says Matt Miller, head of product and innovation in Key's enterprise commercial payments unit

Email a Friend

Inside KeyBank’s partnership strategy
KeyBank in Cleveland, Ohio on Thursday signed off on its latest partnership and equity investment in a fintech startup, the third for the bank's enterprise commercial payments. The deal with Billtrust, a company that automates invoice delivery and payment and cash application, comes after two other agreements with Avid Exchange, which automates companies' accounts payable, and Instanet, an online security brokerage. Terms of the deal were not disclosed. For Billtrust CEO and Founder Flint Lane, KeyBank's attitude toward vendor relationships and sales was a big indicator of future success. "What most banks do is partner with software companies -- and they love having partnerships, but then they put it in the bag of their sales team and say, here’s another thing to sell. That’s not what KeyBank does, it takes each partnership as its own discreet unit," he said. "Without focus, these kind of things don't work so well." Key is also a sponsor of Ohio’s Fintech71 accelerator for startups operating in banking, payments, insurance, health care, investing and regtech. The bank wouldn't disclose how much spending allocates to fintech vendors and other talent partnerships and sponsorships. "Budget isn't our real restriction," according to Matt Miller, head of product and innovation. "Time is the bigger resource constraint for us rather than budget," he said. Tearsheet caught up with Miller on how Key’s relationship-first approach to clients and how that plays into its partnership strategy. The following has been edited for length and clarity. What percentage of your invoices are done in paper? I think with those clients [using the Billtrust offering] we see at least 50 percent on paper, but it depends client to client. We deal with some really large clients in the Fortune 500 that still have a very high percentage of paper invoices. What's the biggest or most consistent pain point for your clients? Cash application. Once you receive the money how do you direct it to the appropriate place in your system to reconcile the payments? The value of having all that invoice data in one place is the first leg of value. Then by nature, we know when a payment comes back in, where to apply the payment on the back end. BillTrust has built a really nice process involving machine learning and AI to learn as you go so the system gets smarter as more invoices are being sent out and cash reapplied on the backend. To a client it provides tremendous efficiency and cost saving opportunities. How does your latest agreement fit into your payments strategy? Banks historically have been focused on payments execution -- how you help clients move money from point A to point B across different channels. We continue to be focused in that space but as the industry has evolved we believe we also need to add value before and after the payments. A lot of fintechs figured that out ahead of the banks. Tell us about your vendor strategy. Our model is two-pronged: It’s finding a great partner who fits client needs and with whom we can structure a commercial arrangement to offer a service to our client; and having some sort of equity ownership in that partner so we can be seen in a greater strategic light and have a deeper integration with the partner — a lot of times at the board level in an “observer” role. How do you determine what clients need? We take a relationship-first approach with our clients. We have specifically organized our sales force around how our clients see themselves; around industry and vertical rather than product and services. Client-wise our book has a lot of industrial companies, from a vertical perspective, and that's a sweet spot. We want to understand all the details of clients’ financial operations deeply enough that we can go in and consult -- we don’t want to show up with a product pitch. If we do have one it’s rooted in a deep understanding of that client. How do you get feedback from clients? Our product team needs to capture that info from our sales force. We need to be out on the ground with clients as much as we are in the ivory tower. That’s probably how we get the most of our information but we also use market research and intelligence methods -- surveys, interactive communication with clients, focus groups, client events. We try to be pretty robust in how we gather feedback. We’re happy to co-create when and where it makes sense -- both with clients and fintechs. So when do you develop something yourself and when do you look to a startup to do it? We have to take an honest look at whether we can do this ourselves or if a partner will help us get to market more quickly with a better offering or more meaning to the customer in the highest quality way relative to competition. With a partner you're dealing with a company focus 24/7/365 on one particular offering. Here, we might not have the ability to focus like that and that’s when it makes sense to partner. Who is the competition? Everyone is raising the bar, we can’t just look at the usual suspects within our industry. We have to look at fintechs, we have to look at technology companies like Amazon and Google who are serving in other ways that are making customer think about how they experience technology. All of these things go into our calculus.

0 comments on “Inside KeyBank’s partnership strategy”

Outlier OpinionsMakers

Culture and Talent

Gen Z covets careers in finance over any other industry

  • Gen Zers are now thinking about climbing the corporate ladder and finance is their preferred career choice.
  • Job stability is the top priority of Gen Z college graduates, followed closely by high paying salary.
Sara Khairi | August 25, 2023
Day in the Life

From hazardous material engineering to running Truist Foundry: A day in the life of Lindsay Holden, head of Truist Foundry

  • Many paths can lead to a career in financial services. Head of Truist Foundry, Lindsay Holden's journey began as a hazardous materials engineer.
  • Craving work that gave her more flexibility, Holden eyed entrepreneurship and eventually built Long Game, which was acquired by Truist last year and relaunched as Truist Long Game.
Rabab Ahsan | June 27, 2023
Day in the Life

Embracing unpredictability: A day in the life of Sung Hae Kim, Chief People Officer at Kueski

  • What’s it like working at the largest Mexican BNPL firm while living in the US?
  • From unpredictable workdays to outdoorsy weekends, here’s a day in the life of Sung Hae Kim, Chief People Officer at Kueski.
Ismail Umar | February 14, 2023
Banking, Culture and Talent

Bank branches are getting a facelift. What are smart branches?

  • From opening cafés to building community centers, bank branches are changing.
  • Big names like Capital One, Bank of America and JPMorgan may be spearheading the branches of the future.
Rabab Ahsan | February 02, 2023
Day in the Life

‘Product managers wear a lot of hats’: A day in the life of Melissa Manne, managing director of digital channels at Chase

  • The past few years, Chase has been zeroing in on its digital offerings. Leading innovation across digital experiences is Melissa Manne.
  • As managing director of digital channels, Manne focuses her energy on strategy, empowering her team, and staying in sync across the organization.
Rivka Abramson | January 24, 2023
More Articles