FISPAN - Next-Gen Commercial Banking - August 2022 - Find out how FIs can use integrated banking services to meet the digital needs of SME customers

Smartphones have made it possible for almost anyone, almost anywhere, to connect to the Internet, causing transformations in the business world, especially in banking. Products and services once based in the physical world are increasingly migrating to digital channels. Although the pandemic quickly accelerated this process, it actually started years ago.

“When we started almost 15 years ago, we started to see a lot of trends that are everywhere now,” Anthony Peculic, Head of Cards and Banking as a Service (BaaS) at Cross the riversaid PYMNTS in a recent interview.

Cross River was founded in 2008, when neobanks started to emerge. Around this time, Peculic explained, the industry witnessed the birth of innovative money movements such as push-to-card, with companies such as Uber leveraging this innovation with great early success. of the 2010s. Soon, solutions allowing people to earn money more easily multiplied. Cross River’s formation at the start of this change gave him a unique perspective on meeting the digital needs of consumers.

“What we see is that to be an effective partner for our customers, we have to provide them with all the capabilities and all the products they need,” Peculic said.

Branch banking is not the focus

Consumer interest in branch banking has plummeted since the onset of the COVID-19 pandemic. However, for Cross River, branch banking has long been of secondary importance, due to its origins.

“[We opened in 2008,] when [many] traditional banks were closing and branches were closing, making conventional banking and lending less accessible to consumers. As a result, Cross River explored innovative technologies to integrate into the banking system to reach consumers in new ways,” Peculic explained.

In 2010, for example, Cross River entered into its first technology partnership, after realizing the growing demand for partnerships with third-party creative platforms.

“We knew a window of opportunity was opening for an agile, technology-driven bank that aspires to provide access to credit to consumers who have been let down by traditional banks,” he said.

FinTechs are reaching out to consumers who may have relied on going to a bank branch by providing access to credit and other banking services in new ways – an approach that Cross River has taken.

“Cross River’s core business and offerings are in [the digital solutions] space, and much less in our branches,” Peculic said. “Although our original branch still exists today in Teaneck, New Jersey, the banking industry has changed. Basically, I don’t see the physical presence disappearing. However, I think there will be ways to make it more digital.

Online banking and digital tools are essential

To meet the needs of its customers, Cross River offers a diverse set of products, starting with payments. It offers customers almost every way to transfer money, including many real-time payment options.

“It allows our clients to … select and use the best methods to get the money where they need it, whether [they are] paying bills, paying businesses, or just moving money around accounts,” Peculic said. “All of these things come together, and we have to provide all the tools to support that.”

Cross River’s mobile wallet offerings exemplify the bank’s holistic approach. The bank supports all major mobile wallets and its customers use them to such a degree that Peculic considers this feature almost a requirement. The bank also has a lending platform that supports the adjudication and provisioning aspects of loans, including buy-it-now-pay-later (BNPL) services.

The integrated bank is at the heart of meeting customer needs

Peculic explained that integrated banking services are essential for Cross River to meet the needs of its customers. This means providing and integrating, primarily through application programming interfaces and other web-based solutions, various services that look and feel like they are part of the client company’s brand. These are both common business solutions and services that are not traditionally considered banking services.

One notable example is BNPL’s standard functionality, one of the most sought-after features by traders. When a customer of a merchant initiates a purchase and selects the BNPL option, this process is made possible by the integrated bank.

“It integrates banking services into what is a normal day-to-day [purchasing] process, something that was not traditionally considered banking,” Peculic noted.

With the financial world awash in digital products, being able to offer the solutions customers need exactly when and where they need them is a growing brand necessity. By allowing merchants and other businesses to add such functionality to their brands, integrated banking can become a bank’s best friend.