FIS Fintech Founder Feature | XpenseOne’s Jim Schlosser and Victor Yefremov
Bank Branded Expense Management
By Jim Schlosser and Victor Yefremov, XpenseOne
Always searching for ways to make banking employee and customer lives easier, XpenseOne’s participation in the FIS Fintech Accelerator, in partnership with The Venture Center, has been an incredible experience. We’ve spent 18 weeks validating our solution and getting to know the FIS product team, and now we’re looking forward to Demo Day. We’re passionate about our company because it can make a big difference to a financial institution.
While interchange revenue makes up the second-largest revenue stream after interest income, institutions are still looking past interchange revenue as a strategic growth opportunity. Interchange revenue is one of the best potential opportunities for incremental revenue gains in 2020-2023, and the aggressive cross-sell approach of some major institutions signal corporate objectives stretching beyond loan products. Sales leadership teams are adopting programs to reward more than just commission points on loans written. In many cases, this adoption represents opportunities with core business audiences, where non-loan programs penetrate competitor customer bases in a Trojan horse-like manner. I already knew the tight connection we maintained as a business with our local bank, but our bank never offered us any corporate card other than AMEX.
AMEX aggressively pursues business card accounts acquisition and demonstrates monthly purchase volume at three times the industry average. Compound this spending velocity with the fact that they, and commercial cards in general, hold higher interchange rates, and you can see how being strategically aggressive in this arena pays dividends. So why does this opportunity remain a passive footnote for most community and regional banks? Institutions such as AMEX, Wells Fargo, and US Bank invest heavily in technology and expense management tools that facilitate these business card services.
But points are not enough. To offer greater value, we need digital tools.
Let’s take a lesson from the Salesforce playbook, which remains one of the highest growth tech companies for many years. Do they sell their product because salespeople are overzealous to capture their daily activity in a journal-like fashion? Do salespeople attribute their sales successes to a CRM system? Nope. These things are simply a time-tax for most salespeople, similar to dealing with expense reports. Salesforce is sold to the back office because, in any sales-oriented organization, revenue predictability and accurate sales forecasts are the back office financial team’s holy grail. Salesforce sells crystal balls — all your sales activity rolled up into dashboards that let you know exactly where the business stands.
XpenseOne is similar in that it makes back-office operations easier, period. Consider a commercial builder with 500 card expenses to reconcile monthly. Using a manual process, this can easily consume 40 or more hours of monotonous, mind-numbing, and error-prone activity every month. Alleviate this pain, and you will see just how quickly you can alter your business policy to incorporate the use of your financial institution card. The addition of digital expense management capabilities enables cardholders to capture receipts via a mobile app, and then automate the submission and approval process. The whole process occurs on a trusted online banking portal in a consistent format that can be approved, reconciled, and uploaded to an accounting system.
XpenseOne can sync institution card transactions and effectively automate the expense management process from swipe to reconciliation, eliminating the majority of manual effort involved in the expense management process. As a white-label offering, it’s institutional branding enabling your institution to take all the credit, driving higher retention and use of your card.
When you make life this easy, you decide to establish your card as the single expense source as a business policy, an obvious choice. Any other path, such as using a personal card for business expenses, reduces operational efficiency, and introduces unnecessary financial impact. Add the stickiness of also being the long-term record holder – effectively becoming a central system of record for your business customers – and you will have established a long-term stream of business interchange revenue, protecting from competing card offerings.
Register here for the 2020 Virtual FIS Fintech Accelerator Demo Day!