Evolving digital technology will transform your business


Digital technology not only has the potential to automate time-consuming processes, but also to enable new ways of managing cash and payments. Sean Gilchrist, Managing Director of global digital channels at Lloyds Banking Group, explains how forward-thinking companies are embracing digitisation to promote efficiencies across the financial supply chain, and how banks are responding to evolving customer needs through channel innovation.

Sean GilchristDigitisation is changing the way consumers shop, the way they pay and how they interact with their friends, families, and of course the businesses they choose to buy from. The growing use of digital channels by consumers is pushing changes in corporate culture, processes and operations regardless of company size or structure.

By 2018, there will be more than 10 billion mobile-ready devices and connections globally.1 Given that the world’s population is yet to tip over the 7.5 billion mark, it’s clear that this digital age is upon us and that consumers are receptive to innovation in this area. For example, more than a million people have registered for Paym, a new mobile payment system, since it was launched by the UK’s Payments Council in April this year – and more than £6.5m in payments have already been made through the service.2

Accessing the benefits

Digital channels have the potential to bring significant financial benefits, such as efficiency gains in:

  • cash visibility and control
  • payables and receivables
  • working capital management
  • foreign exchange (FX)
  • bank account management.

The first consideration is for a business to examine the way they engage with their customers. Are they making it easier, quicker and safer for them to buy goods or services online? This is the best starting point. As you start to really put yourself in your customers’ shoes you realise that you need to address the needs of both the tech-savvy and traditional customer. Usability and flexibility are paramount.

Harnessing digitisation internally

In addition to customer-facing changes, it is important to consider internal changes too. Evolving technology should be seen as a catalyst for change – not a threat. For example, evolving consumer payment behaviours will impact the company’s accounts receivable (AR) process. And for too long, receivables have been a low priority when it comes to technological sophistication.

Paper-based, manually intensive, error prone AR processes now have accessible and affordable digital counterparts across the order-to-cash cycle (OTC). For example, mobile cheque deposits, near field communication (NFC) enabled point of sale terminals, and virtual accounts. Finance Directors (FDs) should be in regular dialogue with their banking partners around these innovations since digitisation of AR can improve efficiency, increase straight through reconciliation (STR), lower costs and improve working capital metrics.

Similarly, companies’ accounts payable (AP) can be enhanced through increased use of digital channels. Mobile payments approval is an obvious example. But implementing a card programme for travel and entertainment and/or procurement can deliver greatly improved visibility over payables, for instance.

Making the most of data

As data storage and analytics become even cheaper and more secure, companies can leverage digitisation to analyse their payment and collection patterns and requirements. With the data analysed, the FD will be better informed – and enabled – to identify strategic ways to optimise their AR and AP. Certain banks are now providing this as a value-added service.

FX exposures can also be monitored more closely through digital channels. And rather than converting every foreign currency payment individually, banks are now leveraging technology on their customers’ behalf to group foreign currency payments, which is cheaper and more efficient for end-users. This is just one of the digital innovations that businesses now expect from their banks.

The response from financial services

In anticipation of these growing digital demands from customers, banks – both retail and commercial – are investing heavily in their channel strategies. Lloyds Bank is no exception. To make an FD’s working day simpler, banks are now investing in how they use the digital arena to offer even more support to business customers. Banks are working hard to supply customers with easy-to-use digital tools to improve cash visibility and control.

With businesses becoming ever more international, banks are also working hard to integrate more core trade currencies into their online offering – a direct response to customers’ evolving needs. Moreover, banks want to design a platform that supports customers as their needs change over time; so systems will offer a flexible architecture where new innovations can be easily bolted onto.

Security is also a key area where banks have invested heavily. According to Euromoney’s most recent cash management survey, the strength and quality of a bank’s electronic banking security is actually the most important factor in selecting an international cash manager. We take that responsibility very seriously. After all, cybercrime is a significant threat – and customers trust us with their data.

Points to Consider

The reality of a successful digital strategy will vary greatly between companies. However, the following tips may help the thought process around leveraging digital channels in your company:

  • Diversify your investment: It’s impossible to predict what the future holds. To remain flexible, be prepared to engage with consumers seamlessly across multiple channels.
  • Take a holistic view: Ensure you have an integrated strategy that synchronises your channels and delivers a seamless customer journey and cohesive brand experience.
  • Unlock value: Digital initiatives can deliver efficiencies for any business. For example, enabling B2B payments via cards can streamline the supplier payments process – delivering cost savings and richer data, while freeing up resources for more value-added tasks.
  • Draw on your bank’s expertise: When it comes to digitising the finance function, your bank should be the first port of call. Leverage bank innovation to garner the benefits of the digital age.


1. Source: Cisco Visual Networking Index

2. To find out more about Paym visit www.paym.co.uk

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