Primary relationship concerns define future of business digital banking

Banking And Financial Messaging


Kevin Pettet

Oct 2, 2023

Multibank relationships for commercial and corporate customers have been the norm for quite some time. In fact, a recent Deloitte report found that 33% of companies with $1 billion or more in annual revenues had a banking relationship with ten or more financial institutions. And in the aftermath of recent bank failures, we are beginning to see this trend accelerate, with small to medium-sized businesses now pursuing multibank relationship strategies. 

Those strategies are understandable. Concentrating all financial services with one institution can expose the company to regulatory issues or other operational disruptions if that bank hits the kind of instability we saw earlier this year. But even within multibank relationships, some institutions are more robust and better suited to the challenges of digital transformation than others. The most effective strategy in the current market is for banks to establish primary banking relationships with their business customers and become the bank that ‘owns’ the operating account. It is essential to competing and winning in business banking.

Winning that battle for primary ownership of the operating account and the overall customer relationship requires a partner focused on helping banks win in the market. That partner should have a unique combination of assets that create compelling new value propositions for banks to better serve client CFOs and their teams. From small- and medium-sized businesses to large corporates with multibank relationships, improved monetization of low-value payments, increased cash visibility and reliable performance benchmarking can position banks to win the battle for primary relationship ownership and accelerate growth.

Creating New Revenue Streams

The battle starts with creating new revenue streams. Until very recently banks relied on monetizing data to produce ancillary revenue and that trend will continue. But generating revenue from payments will be the strategy that wins primary relationships. A 2023 report from The New York Federal Reserve found that income from payment services brings in from one-third to two-fifths of the combined operating revenue of the twenty-five largest bank holding companies. “This contribution to revenue is considerably larger than commonly appreciated and indicates that the production and distribution of payment services is one of the core activities of commercial banks,” the report states. “The greater-than-expected importance of payment services has several implications for the identification and measurement of the banking sector’s output and for theories of the fundamental nature of commercial banking.” 

Bottomline’s strategy is to create new revenue streams for its commercial banks by better monetizing ACH payments. We do that by fully integrating our Digital Banking IQ platform with our Paymode-X B2B payments network to enable the clearing of a portion of the ACH payments volume via that network and, in the process, create a revenue share similar to card interchange fee models.  Banks will then have the ability to retain some of that revenue. They can also choose to pass along a share of that revenue to their business customers who are making the payments. This process creates a rebate incentive with those customers, encouraging them to consolidate more services and payments through their primary bank.  This model reinforces the Digital Banking IQ bank’s position at the center of the banking relationship with the business customer.

Cash visibility

Multibank relationships mean multiple data sets and – in the hands of a lesser partner – multiple payments platforms and dashboards. It is critical for banks to avoid this scenario and provide a holistic view of a business’ cash position across all the company’s banking relationships. Requiring the treasury and finance teams to conduct this reconciliation themselves should not be an option. Bottomline is focused on helping banks provide a holistic view -to better understand their true cash position. When coupled with Bottomline’s best-in-class forecasting tools it enables them to improve their overall financial planning.  The bank that can provide this multibank cash visibility makes the CFO and team’s jobs easier and positions them to become and/or retain the primary relationship position with their business customers.  

This view is supported by the recent Aite Matrix report on cash management technology providers, in which Bottomline received best-in-class recognition. Acknowledging that only 23% of finance and payment professionals feel their cash management needs were being met, it stated that “integrating cash management with onboarding, payment automation capabilities and liquidity management tools are especially attractive in the current environment. Thus, we are seeing the definition of a cash management platform as presented by the leading technology providers expanding as they present their offerings as part of a larger integrated ecosystem.”  


Understanding performance is critical to compete and win the primary commercial banking relationship. A world-class athlete wouldn’t know how they compare to the competition without understanding how their personal best measures up. The same goes for banking. At its core, banking is about numbers. Benchmarks provide objective metrics against which a bank's performance can be evaluated. Instead of relying on perceptions or sentiments, benchmarks offer concrete data on where a bank stands in terms of its peers, industry averages, or predefined targets. It’s also important to understand how the business user adopts and uses the platform. Once a bank can measure and understand its performance, it can make the decisions, investments and changes necessary to better serve its customers, build primary relationships, compete, and win in the market.

At Bottomline, our digital banking platform features benchmarking and analytical tools, which focus on doing just that. Using payments and cash management data, plus online engagement metrics, we help customers benchmark against their peers to evaluate digital engagement levels and identify additional sales or relationship-building opportunities. This insight becomes even more important for managing potential mergers and acquisitions (M&A). Benchmarking can lend insight into risk and logistics from announcement to conversion and beyond, prioritizing customer relationships and long-term engagement. 

The Bottom Line: No longer can banks rely solely on traditional metrics or age-old rapport-building tactics to gain and maintain primary banking relationships. A fiercely competitive landscape and wide-ranging availability of market intelligence means that the battle for the primary banking mantle demands innovation, tailored strategies, and a profound understanding of a company's unique DNA. By focusing on creating new revenue streams, best-in-class cash management and objective benchmarking the primary relationship is within the grasp of banks who choose to embrace this strategy. 


Related topics

Commercial Banking

Posted by

Kevin Pettet

Kevin Pettet is the Chief Revenue Officer, North America Banking and Financial Services and has built high-performance organizations by empowering people and delivering for customers which translates into a proven track record of growth and results.

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