âAn arduous and laborious affair.
This is how Sam Seaton, CEO of the open data platform Moneyhub, describes the month-end financial close process of reconciling credit card payments – which, due to the uneven distribution of data, risks often suffer from bottlenecks.
According to Seaton, companies that handle expense cards for employees typically receive a monthly statement from the bank, then have to frantically and manually attach receipts and categorize expenses within a short period of time. âAnd that, of course, assuming you have all the receipts and the employees are available to provide all the information needed,â she told PYMNTS in an interview.
Related news: Moneyhub, the Expense Once team on reconciling credit card payments
To automate the tedious manual task, the UK-based financial management platform recently announced a partnership with expense management software provider Expense Once, which will use Moneyhub’s open banking technology to create a solution in real-time process that streamlines the process for corporate cardholders. by generating expense reports on their behalf.
Through machine learning and computer vision, additional features such as digital receipts and categorization will automatically be associated with every transaction on behalf of the requester, “creating a quick, easy and accurate process for reconciling requests and submitting expense reports, âSeaton explained.
Founded in 2013, the fintech company has grown into a leading platform for open finance and data intelligence, providing businesses in the UK and Europe with an application programming interface (API) and white label solutions to help improve the customer experience.
In the UK, over 200 financial service providers through more than 580 connections have access to consent-based financial data through Moneyhub, with 3,500 more connections receiving the same service across Europe.
Take the digital leap
Saving time and money is the supposed goal of every business; therefore, the digitization of manual processes would be a matter of course for companies looking to increase their efficiency. But that’s not the case, Seaton said, given that some companies are still stuck using their old manual processes and have yet to make the digital leap.
She attributed their reluctance in part to a lack of education and awareness about the capabilities of open banking, although some have viewed banking practice as the main driver of financial change and innovation for years.
Another challenge mentioned by Seaton is the time and effort required to modify existing methods of operation, which, although often less efficient and more expensive, can be deeply entrenched in the system and therefore extremely difficult to modify. “We must also not forget that people fear that they themselves or all of their departments will lose their jobs, [and] on top of that, people don’t like change, âshe noted.
For companies that are open to change, however, she said “it can be slow” if there are no strong leaders who see the need for business transformation in order to survive in an era of high expectations. of consumers when it comes to digital interactions are at a critical juncture. all-time record.
But it can still be done, and Seaton suggested that companies take the time to build confidence by starting small, then testing and refining the process before finally scaling the solution to a fully automated digital experience.
âThe beauty of open banking, and technology more broadly, is that the cost of testing and learning is less than what most average consulting firms charge for a few weeks of work. Redeploying part of that consultancy budget is quite effective in our experience, âSeaton noted.
She further advised businesses to select an open banking provider that has the best possible categorization engine for personal and business transactions, as well as broad coverage of banks – and not just the obvious ones. This approach, she said, will ensure that manual administration is removed as much as possible from the digital process, allowing widespread use of the digital solution.
VRPs push Open Banking to the general public
In July, regulated FinTech announced its biggest round of investment to date, totaling $ 18 million, which the company has budgeted to fuel its expansion into new markets.
But Seaton said the most exciting development of 2022 is the mandatory implementation of Sweeping via Variable Recurring Payments (VRP) which will allow UK and EU consumers an unprecedented level of control over their finances. July 2022 is the date set for the introduction of VRP 1.0.
Instead of using direct debit or credit and debit cards, Seaton said customers can also connect authorized payment initiation service providers (PISPs) like Moneyhub to their bank to “sweep” money between accounts, making VRPs more profitable when helping consumers avoid overdraft fees. , for example. They also serve as a highly secure replacement for card payments, direct debits and standing orders.
âUltimately, VRP will enable the creation of new products that were previously unthinkable,â Seaton noted. âThey will pave the way for payment innovation and the creation of new financial services designed with a focus on customer needs. “