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The Bottom Line

SRM recently announced a partnership with the Rochdale Paragon Group, incorporating SRM’s automated invoice auditing solution into Rochdale’s vendor management software and services portfolio. This alliance is an opportunity to deliver our 28 years of experience in high-dollar, complex invoice auditing to a broader segment of the credit union market as part of the best practice offering from Rochdale.  

The complexity of many critical vendor invoices makes it practically impossible for a financial institution to do a complete audit of them each month. Any auditing of these invoices is typically months after payment. Yet, over decades of auditing high-value critical invoices, our firm has discovered that 10 percent of them contain errors.  

At the beginning of 2020, "contactless" was an obscure term typically associated with the new generation of debit and credit cards. Using near-field communication (NFC) payment technology, these cards are capable of being tapped instead of swiped or dipped - shedding several seconds from time in the subway turnstile or checkout line. However, despite Visa and Mastercard's heavy promotion, US adoption has been gradual, shaded toward frustratingly slow…until the pandemic hit.

The banking industry’s biggest service providers, sometimes referred to as “battleships,”  have grown largely  through acquisitions. When market demand moves toward a new channel for delivering financial services (e.g., smartphones) or potential for a replacement solution opens up a new market tier (e.g., digital banking among regionals), these “battleships” acquire other entities to keep pace and/or unlock a new opportunity for revenue growth. Often, they wait for an upstart to gain some market traction then give its investors an exit strategy worth multiples of their initial stake.

In the early stages of the US coronavirus pandemic, SRM reached out to banks and credit unions to gather insights on initial FI reactions and changes in customer behavior. A previous blog detailed the findings of that March survey.

In late June-mid July, SRM again collected responses on how perspectives had evolved once leaders had more time - and a bit more information - to assess their options. We received an even greater response, with impressive diversity in geographic footprint, asset size, and credit union/bank participation.

At SRM, we often receive questions about how our services can deliver cost savings without harming existing vendor relationships which have taken years to cultivate. Our answer is simple: We do not believe antagonistic, adversarial negotiations are in the best interest of anyone – be it the client, the vendor, or our firm. And we have validated this point of view with the thousands of contracts we’ve negotiated, while also adding over $3.6 billion of value to the financial institutions we have served. A recent engagement with 1^st Bank of Sea Isle City in New Jersey is an example of this conviction in action.

Knowledge is power and most bankers have figured out that they’re sitting on a treasure trove of information about the consumers and businesses they serve.  However, using this information to empower their account holders and deliver services tailored to their needs has been a difficult goal for banks and credit unions to achieve. 

One of the many changes brought by COVID-19 was an acceleration in the participation of the delivery economy.  This level of participation is likely to continue to rise as more businesses develop viable online ordering and delivery offerings.  Companies such as Amazon, Google, and Apple have made personalization of offers and the anticipation of the consumers’ needs prerequisites to any successful online engagement.  So, as the delivery economy expands, successful offerings will need to reflect these same characteristics delivering the convenience and speed consumers now consider mandatory as a basis for loyalty. 

In 2018, SRM expanded its operations to Ireland, the United Kingdom, and Europe. This division of our firm, known as SRM Europe (srmeurope.com), services a diverse set of industries, including financial services, music entertainment, food retailing, and architecture. While these are different markets, all have been affected by the pandemic and reports across these varied verticals virtually tell the same story.

The overarching message is that organizations, of all types, need to successfully adapt to change. As we’ve recently experienced, change happens, regardless of one’s level of preparedness. However, organizations often shy away from changing course, even after the tides have shifted. As change is the only constant businesses can rely upon, a culture of adaptability, clear communications, and good relationships will help ready any organization for the challenges ahead.

In mid-March, when Americans were beginning to absorb the notion of shelter-in-place orders, SRM reached out to our financial institution clients to get a snapshot of their mindset regarding approaches to meeting consumer needs in the age of the pandemic. The findings of that initial survey can be found here. 

To refresh this view and learn how time in the “now normal” was impacting banks and credit unions, a second survey was planned in late June. Of course, by the time the second survey was ready to go into the field, COVID-19 was re-asserting itself across the United States. We retooled the study to accommodate the circumstances, revisiting some of the questions from the March survey and drilling down into digital transformation and payments.  

For years, small businesses have gotten very little help from their financial institutions – and no market segment gets a pass on this one. From mega-nationals to community-sized institutions, small businesses have seldom found the assistance they need. Instead, many institutions have either pushed them to retail accounts or offered these small business owners treasury/commercial services.  

Over two weeks ago, our firm offered perspective on some things banks and credit unions can do to proactively support accountholders during the COVID-19 pandemic. Since then, we have maintained ongoing contact with our more than 1,000 clients as this situation continues to evolve. Additionally, we surveyed our industry network of clients and friends to help us understand how the virus is impacting their financial institution’s operations – and they delivered.