Payment contact management - Room for innovation

Executing payments has evolved considerably over the last years. While 25 years ago most payments were done by filling in a paper form, today almost all payments are initiated digitally via a web or mobile banking platform.
Together with this digitalization came also a whole eco-system of toolsto further simplify these digital payments (not considering card payments), like:

• Invoices delivered directly to your banking app (like ZoomIt in Belgium)

• Platforms collecting invoices and providing a payment button to avoid users having to reinput all cash transfer information (e.g. Doccle platform in Belgium)

• QR codes appearing on paper and digital invoices, which can be scanned for immediate payment (e.g. POM or Payconiq in Belgium)

• Digitalization of Direct Debits, allowing much easier onboarding and management of Direct Debits (e.g. Twikey in Belgium).

• Uploading of files with a bulk of payment instructions (e.g. Isabel in Belgium)

• PSD2 Payment initiation initiatives (cfr. TPPs with PISP license)

• …​

But even with these tools, still many payments need to be done manually. For this, the user experience still resembles strongly the experience of 25 years ago, except that it is digital now, i.e. the digital form has exactly the same lay-out and input fields as the original paper form. The only advantage for you as a customer is that you don’t need to deposit the paper form at your bank anymore.
This process could however be made simpler, by a better "Payment Contact Management" module.

Some banks offer already some basic features to simplify manual payments, like the ability to re-execute the same bank transfer as an existing payment transaction in your account history, by automatically creating a payment contact when the same account number is used a few times or by auto-completing certain information based on a contact address book, but all these features are still very basic.
A more extensive "Payment Contact Management" module would allow a much faster input of a cash transfer, but would also allow to get better insights into your contacts. In the end as a user you would like your "Payment Contact Management" module to be a light CRM solution of your financial contacts. This means also that the tool should have the typical characteristics of a good CRM tool, like:

• Easy creation and editing of a contact, with more complex capabilities like attaching multiple cash accounts to the same contact

• Possibility to import/export contact information and potentially synchronize with external tools (like Google, Facebook, LinkedIn…​)

• Good search and filter capabilities

• Ability to store interesting additional data about a contact apart from the name and bank account, like email, phone, address, birth date, category (e.g. friend, family, merchant…​), Facebook/Twitter/LinkedIn ID, picture/logo… This additional data can be used for analytics, for pure storage (as your personal CRM tool), but also to initiate more easily a credit transfer (by using these so-called aliases to select the right counterparty).

• Grouping contacts into different groups

• Auto-completion of data when creating a contact, based on public records and crowdsourcing (e.g. adding a public company as a payment contact)

Apart from these basic CRM capabilities, some specific features linked to payments should also be foreseen like:

• Management of security rules by contact, e.g. define the maximum payment amount per channel per payment contact or classify contacts according to their trust level, meaning that a payment to a highly trusted contact could be initiated with much less security checks (e.g. allow a large payment via mobile phone to such a contact with just a Touch ID authentication)

• Initiate a specific action from a selected payment contact, such as initiating a standard payment, sending a birthday gift (i.e. cash transfer, but with birthday wishes automatically associated), sending a request for reimbursement for a specific amount, sending your contact details to the contact, sending a report of all debit/credit movements (as of certain date) with this payment contact as counterparty…​

• Assign a specific PFM expense/income category to a payment contact, allowing better PFM insights

• Create an expected payment (to receive) for a payment contact (to act as a reminder) and get reminded when not yet received after due date

• Define a budget to receive from/pay to a specific contact and visualize how the actual compare with the budget forecasts

• Associate a default amount and comment to a payment contact (or list of default amounts of comments to select from)

• Visualize all credit and debit movements linked to a payment contact

• Automatically enrich the transaction information in the account history screen with the stored additional info about the counterparty, like showing the picture/logo associated to the counterparty.

• Automatically update the bank account to be used for paying a large corporation, i.e. a large corporation could push an automatic update of their bank account number (thus reducing the number of people still using the usual, old account number)

• Update your personal contact information and push the update to everyone having you as a payment contact (e.g. when changing your address or bank account number)

• Publicly share within the bank (a part of) my contact details with other customers within the bank (with possibility to manage restrictions and access levels and potentially even work with connections, like in social media)

• …​

Such a tool would allow to make your daily banking app more personalized, instead of just being a factual overview of your financial statements.

Such a contact management module would also be beneficial for the bank in many ways, i.e.

• Added value to the customer, i.e. the bank offers a good CRM tool to the customer for free (currently most private persons keep their contacts or their phone, on paper or in an Excel file), which is well integrated with the banking tool and simplifies the initiation of payments

• Just like a PFM tool, such a tool has a high customer stickiness, i.e. as people put a lot of effort in building up the contact data, they will be reluctant to switch banks, meaning it leads to better customer retention

• The additional data (if user gives consent) about the customer’s payment contacts can be extremely valuable for the bank to enrich the data showed in the PFM tool (e.g. crowdsourcing categorization and address data), to identify good prospects, to better understand and thus serve the customer, to better assess (score) the credit risk of the customer…​

• A better management of payment contacts will also result in less errors in payments (e.g. due to a wrong account number), less fraud issues (e.g. a fake invoice sent to a customer presented as an invoice of a well-known company, but containing the account number of a fraudulent counterparty) and less security issues, as authentication can be done more fine-grained (i.e. less strict than today for trusted counterparties and more strict than today for unknown counterparties)

Clearly there is a huge potential for banks for such a tool. It will be interesting to see banks further exploring this opportunity.

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