The Payments Data Monetisation Opportunity in North America

It’s never been more important to understand what corporate clients want from their bank partners. Faced with an increasingly complex operating environment, large corporations are looking to banks for support with a range of different objectives. These differ between organisations, but most come back to two themes: to help reduce costs and increase operational efficiency.

This is nothing new of course. Corporate clients have always pushed their bank partners to provide richer and more valuable services. What is different in today’s market is that the competitive intensity of the market means that clients have far more choices over the providers they can work with. Of greater concern to banks is that many clients are now very open to the idea of forming relationships with new providers in order to access the services they need.

For banks, this increases the urgency to act. Indeed, the question is not whether to invest, but how to adapt in order to deliver the service enhancements that will drive new revenue and protect the existing business. As a result, the concept of data monetization—using the data assets banks hold to support commercial benefits—is rising up the industry agenda. While many banks already leverage their payments data to support initiatives relating to operational efficiency and enhancing client-facing services, there has been an explosion of interest in this subject in recent months.

To understand the path forward for banks active in North America, Celent has conducted primary research among 82 financial institutions and 48 large corporate clients across Canada and the United States. The aim is to highlight the pain points facing corporates and the specific opportunities for banks active in the region. This is the second report in a series of three, including dedicated reports looking at corporate client needs in Asia and Europe.

Our key findings for banks active in North America include:

• 79% of banks in North America say that client demand for data-led services is increasing
• 83% state that their organization has a clear strategy to leverage payments data to support added value services
• 46% of banks view ISO 20022 migration as an opportunity to deliver improved services for corporate clients

Most importantly, analysis of the services that corporates will pay to access highlights a number of revenue opportunities for the industry:

• 71% report that they would consider moving some or all their banking business to partners that can bring efficiencies
• 33% of corporates ranked real-time cash balances as one of the top three services they would pay to access
• Virtual accounts are a clear hygiene factor. While willingness to pay for this service is low, as many as 36% would consider moving to a new partner in order to access this service

For banks, inaction is not an option. While there are several areas that can bring revenue gains, there is an equally urgent need to invest in order to protect existing client relationships.