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Highlights from AFP2020 include the value of data science in cash-flow forecasting, as well as the digitalization of receivables and the challenges that come with it.
This episode of the Payments Podcast features Alana Streit, General Manager of North American Corporate Payments for Bottomline, as she joins podcast host Rich Williams to review this year's key takeaways.
Unsurprisingly, unrelated to payments, COVID-19 also got a look in. Discussion surrounded the impact that the pandemic has had on our working days and how we can consider the changes that our cognitive abilities go through throughout the day to structure our time productively.
Rich Williams: This year’s AFP event, that’s the Association for Financial Professionals, like the vast majority of conferences in 2020 moved to a wholly virtual experience. With two weeks chock full of sessions from some of the biggest names in the industry, this episode will review the top five highlights that you should be aware of from this year’s discussions.
Hello, I’m Rich Williams, host of the Payments Podcast, and with me today is Alana Streit, General Manager of North American Payments at Bottomline and, of course, an attendee of this year’s AFP event. Alana, thanks for joining us today and a very warm welcome onto the show for the first time.
Alana Streit: Hi Rich, great to be here, thanks so much.
Rich Williams: No, no, not a problem at all. Now AFP 2020 came with the tag line ‘Virtually together’. How do you personally feel the virtual event went this year, and, indeed, did it live up to the spirit of togetherness?
Alana Streit: Yes, virtual is tough, really, things are hard for all of us these days and you definitely can’t expect to replace what an in-person conference was and the togetherness of an in-person conference with online and virtual. You have to create a whole new playbook on how- where you’re going to operate, right, and think about it differently.
AFP did a really great job this year. I was impressed, I thought the schedule worked well, I liked the format, the technology worked great. It wasn’t so much about networking like it usually is, it was more about learning. I thought of it that way and I know my team did as well. We got an opportunity to spend a lot more time in the sessions than we used to be able to.
We were always on the convention floor, lots of busy days, breakfast till drinks after dinner, right? So, that, certainly, was harder but I still learned a lot and really enjoyed it. So, I’m happy to share some highlights with everyone listening out there today.
Rich Williams: Thanks Alana and that leads us very nicely onto my next question which is, of course, the main topic of today’s episode. So, what were your particular highlights from the event and the particular sessions that you attended? Let’s begin with the first key one for you please?
Alana Streit: Yes. For sure the first highlight and not surprising, B2B payments are still way too hard, way too hard for everyone. I’ve been building payment software for over 20 years now and I’ve seen it change a lot and I’ve lived through a lot of pain, blood sweat and tears of building software and payments and B2B payments in particular and the high-risk nature of them and the balance between speed and efficiency but preventing fraud and risk and compliance.
It’s just still too hard but I see that the market is now, I think, even more open to change and maybe the global pandemic which is a lens over everything right now, maybe that is really causing some of that and that was definitely talked about in almost all the sessions. The corporate voices need to get involved. Don’t just let the banks make all the decisions, right?
Integration is still too hard. We try things like ISO 20022 which, fundamentally, was supposed to make things easier and more consistent but it’s not. Everybody implements it a little bit differently. If corporates don’t get more involved, you know, they’re going to bear the brunt of the cost. It’s their systems, it’s their processes, it’s their people and, I believe, they really need to lean in.
I believe they’ll be leaning in and asking more and more Fintechs, instead of their banks, I heard that a lot as well and that excites me and excited about what’s to come, what’s to come in our industry.
Rich Williams: We’ve certainly been banging the drum of not leaving everything to the banks in previous episodes. I think that shift and looking towards Fintechs and corporates to take and bear some of the brunt of the responsibility is really important. So, in the spirit of learning rather than, simply, networking and having a few sneaky drinks afterwards, what are some more highlights from you please, from this year’s event?
Alana Streit: Yes. Data is king and I did want to talk about one specific session that was really interesting. First, you know, data, it’s the most valuable asset on earth. I hear people say it’s like oil, right? It must be refined. So, data science is now at the centre of so much and everyone should be investing in data science, period. It’s that old adage of garbage in, garbage out, and every session I attended was about ‘You’ve got to have good data and how do you find the data and cleanse it and make sure I’ve got a centralised customer database’, all of those things, right, is it accurate?
Well there was a really interesting use case session with Accenture. They have billed a cash inventory optimiser and they have applied data science, essentially, and artificial intelligence to cashflow forecasting. They’re a huge global organisation, right? I think they operate in 60 countries, and their goal was to reduce idle cash and get it centralised into their main bank, their central bank, and then have it work better for them, right?
They think of cash as inventory and they use data science and predicted analytics, I think, they said 12 different models that their data scientists built with, you know, just off the shelf or open source technology to understand what they really needed to have on hand in every country to run that operation, and reduce their average cash on hand, centralise it and took so much more of the pain of the analysis from the people and the time consuming pain to figure that out.
Then solved a pretty significant cashflow forecasting problem with artificial intelligence. So, I thought it was really interesting. I have to keep saying that everyone should be investing in data, a data strategy, and leveraging data science and the tools that are out there to make it work better for you and Accenture clearly has done that in their cashflow forecasting.
Rich Williams: I totally agree. I think the old adage used to be ‘Cash is king’.
Alana Streit: Yes.
Rich Williams: Well, I think, now, we’re all agreed that data is king and-
Alana Streit: Data is king.
Rich Williams: Absolutely and those predictive analytics are things that we have to start relying on and, clearly, they have to mature so that we can trust them and they become more and more accurate. It’s very encouraging to hear that that was a key take away from you. What else can you share with us Alana?
Alana Streit: Maybe not as interesting, but definitely something that software should solve is bank fee analysis. Our corporates have ten plus banks, easily. Ten plus banking relationships could be 15 different accounts, right, and lots of different services from all those banks and banks love to charge fees. Bank fee analysis is way too difficult.
There were specific sessions on people talking about it’s really a full-time job and it’s kind of a boring job. Who wants to spend their job analysing bank analysis statements? I think software and technology should be easily applied to solve bank fee challenges, right, decipher it, make sure you’re utilising the services that you’re paying for, uncovering fees for unneeded services. It can be an eye-opening exercise.
There were a number of sessions on the methodology that you can take to do bank fee analysis. I’m a big proponent of apply software to that, right? It’s a high return on investment. There should be a consortium of data that not only compares your own fees but to others I think of, like, most of us, we used to travel, right? You probably know who the points guy is who analyses rewards programmes, like, credit cards and other travel programmes, why can’t you do that with bank fee analysis, right?
We need to be taking a page from the consumer world when it comes to B2B and make it easier and use software to do that. I attended some really interesting sessions on that and it definitely has peaked my interest for future functionality we’ll be providing to our customers as well.
Rich Williams: Certainly. From my experience of working for Bottomline and speaking to a lot of our corporate customers, it’s often met with the response, “Well, we just don’t know what we’re being charged for today.”
Alana Streit: Right.
Rich Williams: It’s very hard to aggregate and find a best value and streamlined solution if you can’t see the problem you’re trying to solve in the first place. So, again, a very important topic and glad to hear that was discussed there.
Alana Streit: Absolutely. It shouldn’t be that difficult, right? I completely agree, yes.
Rich Williams: Okay. I think we’ve got time for a couple more. What’s your fourth highlight from the session, please?
Alana Streit: Well, we’ve been talking about payments but I would be remiss to not talk about receivables. Receivables, receivables, receivables. I attended a session on the receivables journey and, I think it was CentOS who made a pretty significant investment in their journey to streamline their receivables. Receivables are still extremely cheque heavy, right?
Now with COVID, people are definitely trying to speed up their shift to digital. Receivables are still very cheque heavy but they’re definitely seeing it shifting and shifting the right way. When shifting to digital, it actually makes applying receivables even harder. I didn’t appreciate that, like, less than 10% of B2B ACH payments have the remittance data needed to apply receivables and it’s actually easier with a cheque.
Rich Williams: Astounding.
Alana Streit: Which is definitely- someone who is so passionate about electronic payments and, you know, I grew up as a wire transfer girl, which is funny, I’m passionate about electronic payments. It just, kind of, boggles my brain. So, they spoke of the substantial portion of manual work in AR departments, almost forensic work to apply ACH payments and, again, such an opportunity to solve that with technology.
There’s a way to solve any problem. It depends on- especially with technology, it depends on the time and investment you want to put into it but I know there’s a way to solve that, I know there are some vendors out there that have solved it for people. So, I heard some interesting stories about a journey for lead treasury experts to streamline their receivables and that’s where I think the industry needs to focus and go as well.
Rich Williams: Again, we think of it as a given that these things should be more achievable given the move to a more widespread digital society and digital landscape.
Alana Streit: Yes.
Rich Williams: It really is astounding that we have to go into these things, as you say, in forensic detail and how do we solve these problems? Well, at the risk of sounding like a broken record, people, process, technology, it always has to come back to those three key things.
Alana Streit: Yes, yes.
Rich Williams: Let’s wrap up then Alana with your final highlight from this year’s AFP event?
Alana Streit: Yes. You know, AFP always brings some really interesting key notes and I made a point to attend the majority of the key notes and I love that. This one that I wanted to talk about, Jim Cates interviewed Daniel Pink, he is a New York Times author, bestselling author. He wrote a book called ‘The Science of Perfect Timing’ I think and that was the name of the session.
You would think his topics would be common sense but I really learned a lot. I know it might not be payments related but today in our work from home, never leave your home office, you know, and all the stories we’re being told about plan out your day and schedule your day, even though you’re just getting up from your bed and walking to your office and turning on the computer and all the devices and not stopping, I thought it was really interesting.
I liked that AFP brought him to their sessions. What I loved is, he talked about all the studies around people are either larks, they’re morning- you know, early birds? Or they’re night owls, or they’re the in betweeners. So, everyone has, kind of, a cycle throughout their day. Almost all of us… because 80% of us are either, like, morning birds or, kind of, in betweeners. Because there’s very, very, few night owls.
Most of us go through a peak and then a trough and then a recovery, every single day. So, you might notice it at, like, 3:00 in the afternoon you start just… you’ll burnout, you’re just not operating with the same cognitive ability you did when you woke up in the morning, right? I’m definitely a morning person. My husband hates it, but I am.
So, your cognitive abilities don’t remain static throughout the course of the day and that change is really much more extreme than you realise. He quoted a lot of studies around, you know, in hospitals. A lot of the issues are seen in the late afternoon. So, if you can avoid going to the hospital in the late afternoon, you should definitely do that, right? It was really interesting.
What I loved is how I’m going to apply it is that certain tasks that you do throughout the day, you should think about that task and plan them based on whether you’re in your peak or your trough or your recovery, right? So, your analytical work should happen during your peak, you know? You have limited distractions and that’s when that should happen.
Your trough, that should be your administrative work. Fill out your T&E form, right? That’s your administrative work. Then in your recovery, your mood may be back up but your vigilance isn’t and that’s the best time to do, like, problem solving or brainstorming. So, when you schedule meetings you should not just think about, “Hey, they’ve got an hour free on their calendar”, you should think about, “What am I trying to accomplish during this time and when should I schedule it?”
So, I thought that was really interesting. His statistics were clear across, in the business world, education and higher education and healthcare, he had so many interesting stories, and, so, I’ve actually already ordered his book. It’s really interesting. I thought it was a great key note that AFP brought for their attendees and I enjoyed it and learned a lot.
Rich Williams: Well that certainly is an interesting final highlight to end on and although not entirely geared towards finance, it’s something that I’m sure we could apply to any aspect of our lives. Interestingly, one thing I heard from an internal colleague of mine this week was that, I think, we began this lockdown working from home and a lot of us have found ourselves living from work.
Alana Streit: Yes.
Rich Williams: So, I think, trying to adopt some new methodologies and mindsets into the way we go about our day, can have some pretty profound benefits.
Alana Streit: I love that. That’s what I’m doing. I’m living from work.
Rich Williams: Well you can take that one with you.
Alana Streit: Yes.
Rich Williams: Alana, thanks so much for sharing your viewpoints from the ground level and I’m sure this gives our listeners some topics to ponder and digest and I hope you’ll join us again sometime in the future?
Alana Streit: Thank you so much Rich, I appreciate it.
Rich Williams: So, on the subject of our listeners, we’ve also released an episode during AFP on the key considerations for the accounts payable function with Tristan Thompson from UMB Bank which, of course, is well worth a listen if you haven’t done so already. Unfortunately, that is all we have time for today but in the meantime, you can listen to more episodes on all things payments at the touch of a button using your preferred provider.
Tristan Thompson of UMB Bank gives his views on AP Automation
In its fifth year, the Business Payments Barometer highlights the trends in the payment industry as described by 800 financial decision-makers. Researching companies of all sizes, across all sectors, the report reveals how finance departments are responding to the changing landscape, where priorities lie for the year ahead, and how they deal with fraud and risk.
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