A closer look at Citi’s new integrated solution for institutional billers

The interpretation of digital transformation varies across organizations but true transformation happens when a business becomes future-oriented and keeps pace with evolving technology solutions. 

For traditional FIs, this may mean changing lanes with the way they have been doing things for years and identifying new opportunities. This can be done by innovating their business models, focusing on growing customer needs and preferences, and evolving the brand to be in line with a digital-first world.

It is easier said than done – adopting and managing digital tools is an uphill battle for incumbent institutions that involves a variety of challenges from both external and internal environments.

The increasing pace of change in the payments ecosystem – driven by regulatory changes, security challenges, and other local factors – increases the complexity of managing payments. In addition to a stream of new payment methods – digital wallets gaining adoption, and commerce moving across new channels and surfaces. 

Despite the hurdles, many traditional banking institutions continue to develop, implement, and bolster their digital offerings to align with the growing needs of their customers.

Citi is the latest among incumbent banks to augment its digital services. The bank has integrated its digital payments service, ”Spring by Citi”, into “Citi Present and Pay”, its electronic bill presentment platform.

Spring by Citi is a digital payments service that enables e-commerce and B2B funds flow. The service provides different modes of payments to businesses that are connected with the bank’s back-office treasury management systems and cash management solutions.

Previously reliant on an external third party, the new solution offers Citi’s institutional clients a simpler way to collect payments across a broad range of U.S. payment methods as well as provide digital billing capabilities to their customers – both through a single technical integration.

“Looking across our clients and the market as a whole, we see that nearly all large enterprises are on a journey to transform their platforms, processes, and solutions to be nimbler, more client-centric, 24x7, and digital,” told the Global Head of Spring by Citi, Vineeth Subramanyam to Tearsheet.

This move aims to address the pain points associated with accepting digital payments for its institutional billers. 

These may include the lack of resources to upgrade in-house systems from manual, time-intensive paper-based processes, or the scarcity of resources to support integrations with third-party providers in order to manage digital payments on their behalf. This cost and complexity can be a barrier, making it difficult for institutional customers to accept digital payment methods that their customers want to use. 

Additionally, companies that choose to work with external third parties may at times experience problems related to mismatched or fragmented reporting files due to multiple data handoffs. This in turn can make reconciliation between the two parties difficult.

With the rapid pace of change and innovation in the B2B payments category, solution providers across the board have the scope to do more in order to improve the experience for their institutional clients.

This can be accomplished by making it easy for clients to accept a comprehensive range of card payment methods and non-card payment methods including digital wallets, and offering flexible solutions that span multiple new payment channels (e.g. pay by link, QR code) – as well as the basics of the web, mobile, SMS, and phone. While in some cases, fulfilling the special payment data needs of clients in certain verticals (e.g., support for L2/L3 data, surcharging), according to Subramanyam.

In the present climate, the number of digital fraud attempts – from identity theft to phishing attempts – is increasing. Because of the prevalence and growing concern of fraud and its potential effects, the new integration mandates fraud compliance when accepting payments.

“This combined solution is built with robust fraud management tools that monitor transactions across all digital payment methods – including credit and debit cards, ACH direct debit and real-time Requests for Payment, and alternative payment methods such as digital wallets. Our clients can also validate payer bank account details in real-time to help ensure compliance with NACHA rules that are intended to help reduce potential fraud or erroneous payments made via ACH direct debits,” added Subramanyam.

As Banking-as-a-Service is opening the door to new sources of growth across the industry, Citi plans to continue to build its BaaS offerings going forward. It aims to provide cash management strategies to companies – in the form of managing incoming and outgoing B2B payments, streamlining reconciliation, and providing visibility across the ecosystem.