Unclogging the Bottleneck of Treasury Onboarding
Manual treasury management services onboarding is slowing financial institutions down and costing them revenue. In this episode, Michelle Annett unpacks the real-world pain points of this tedious process and explores how automation is poised to shave days and even weeks off the turnaround time.
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[Website] Q2 Treasury Fulfillment
[Product Overview] Q2 Treasury Fulfillment
Transcript
Cheryl Brown
Hello and welcome to The Purposeful Banker, the leading commercial banking podcast brought to you by Q2, where we discuss the big topics on the minds of today's best bankers. I'm Cheryl Brown. Welcome to the show.
Today I'm welcoming Michelle Annett to the podcast. Michelle's been with Q2 about five years working as a senior product manager focused on small business and business services onboarding as part of our commercial banking product team. But prior to that, she spent more than 30 years working in banks, including seven years at SunTrust, 13 years at Wells Fargo, and more than 10 years at community banks.
So she’s sat in that banker's chair through most of her career, and it's given her some great insight on treasury management services and the issues and struggles that bankers contend with. And that's what we're here to talk about today. So welcome, Michelle.
Michelle Annett
Yeah. Thank you for having me. I'm excited to be here today.
Cheryl Brown
So I gave a really high-level view of your career. But give us just a little more context on your areas of concentration. Like how much of that time have you spent dealing specifically with treasury management services?
Michelle Annett
Yeah, I'm glad you asked. I began my career with 15 years in consumer lending, covering everything from small loans and first mortgages to full-service branch banking. And that just helps you better understand that end consumer. I then transitioned into treasury sales, working with community banks in the Atlanta area. The role evolved into a 20-year journey through every facet of treasury management, including sales, product discovery, implementations, and leading a support team for SunTrust’s largest corporate and investment banking clients.
Over the years, I've had the opportunity to sit in nearly every seat within the financial institution, giving me a deep, practical understanding of the day-to-day operations, challenges, and opportunities across the industry. When I talk with customers, we sort of laugh and joke that I am a treasury services nerd and love everything about the experience that our bankers go through to serve their customers.
Cheryl Brown
So you have this deep, deep understanding of what they go through. And, you know, one of the biggest pain points in treasury management services, from what I hear, is around onboarding. So, but why is it so painful? What is a typical onboarding look like for many financial institutions?
Michelle Annett
Yeah, the onboarding journey. It's really a journey. It's not a process. And it begins when the customer says yes. So when a customer says yes in their mind, that's when they're starting the clock. But the that's not the beginning of the implementation process from an FI standpoint. Before we can put hands on keyboards to set customers up for services at every FI, they're going through high-level information gathering. They're pricing. They're sharing that with their customers and negotiating it. They're doing compliance review. Reviews and approvals are completed.
But none of this starts until the account opening, which may be more time and more steps and more client engagements. And from there, you have to gather the granular details of what the customer needs and how they're going to use a particular product. Then they do agreements, and then the customer has to sign that, and all of that is part of the process.
But again, in the customer's mind, they start from I counted yes to when I can use it, but at the FI you go through all of that before it then goes to somebody in an operations team to log in to multiple vendor platforms and continue to rekey that data over and over and over again. That is collected on often manual paper forms that are sitting on their desk, and it results in a lot of back and forth between the financial institution and their customer, as well as internal partners.
And so it's a long, lengthy process with a lot of different steps. And the bank's customer and the bank are actually thinking of two different clocks and timelines, which creates a lot of the friction.
Cheryl Brown
It's almost like, you know, the old scenario of a duck, you know, above water. The customer sees … you know, I answered a few questions, I checked “yes,” I decided who I wanted to go with to, you know, for my treasury management services, but they don't see the webbed feet under the water just kicking and kicking and kicking and kicking and all the things that have to happen on the back end to actually make that happen. So if most of the process is manual and time consuming, it sounds like, so how long can it take to get a new commercial client fully functional? And how long and how does that length impact the relationship?
Michelle Annett
Yeah. So there's a lot of stuff—surveys and stats—on this. And they'd say for the most basic sort of standardized products in the industry, we sort of refer to them as the Fab Five, which would be online banking, ACH, wires, positive pay and RDC. That can take two weeks to set up until you're ready to start training the customer. But when you get to more complex products or ACH with higher limits that go through approval processes, it can take months, and it really impacts the customer. It impacts the person at the FI.
There was a survey that was done earlier this year and they were interviewing, you know, end users, our commercial customers. And one of the stats that sort of stuck with me, and I think about it a lot in my day-to-day, is they asked commercial customers what impacted most their willingness to refer their bank to their peers or their counterparts. When somebody says, hey, would you recommend their bank—even though they're fully satisfied with their bank, their relationships, and the actual services—one of the number one reasons they don't make the recommendation is because of the length and the pain in the onboarding process.
So it really can impact the perception of the bank as they try and grow their business and get referrals. So it's this dual edged sword. You have to do all the steps, but you also have to think about the customer perception. And that's how it really impacts the relationship. Because quite honestly, they don't understand that somebody had to log into five different systems to turn on that ACH service. And nor should they. They don't need to know how the cake is made, but it does really have a meaningful impact on the overall relationship.
Cheryl Brown
Yeah. And you know, when you are doing that logging on and … a couple of weeks to a month. That's if everything goes perfectly, right? So, you know, I can just hear there are some issues built into that process that can cause some specific problems, like rekeying errors. You know, if you're putting information into five different systems, what's the likelihood that you're not going to mess that up somewhere along the way?
Michelle Annett
Yeah, that's absolutely right. I think it's an interesting point, Cheryl, is oftentimes that CSR or that end operations person who's rekeying it, people don't understand that they rekeyed that data five different times. And by the way, they were looking at a piece of paper on the desk to get their details. And so even the best of us make mistakes.
I worked with a bank, continually work with them on some products we're developing, and one of the things they were talking about is because of all the rekeying and the manualness of the process itself, they have a dual control in place where once the customer is set up, a second person logs into all those different systems and checks it. So we asked, just for full transparency, you know, is that really necessary? Like how often do you find a mistake? And they said even seasoned people, they find a mistake about 30% of the time purely because it's so manual. And if you make a mistake of setting up a limit for $10 million instead of $10,000, you can really understand the impacts of all that rekeying and the potential to make an error there.
Cheryl Brown
Yeah, absolutely. And so I want to talk a little bit about scalability because when a business, you know, that gets their first treasury management services account, I guess it's likely that they're going to grow from there, right? They're not just going to stay stagnant. And what's the process like? Like, do you have to go through this process again when … I know you have to go through this process again if you choose to change banks. And that's why, you know, once you have a treasury management services account, you're very likely to stay there just because of this painful process. Right? But what about when your business grows? Are there some issues there that need to be dealt with?
Michelle Annett
That's a great question. I'm so glad you asked. If you think about in a bank, when they do customer implementations, only 10% to 20% of their total volume is a brand new customer getting a brand new service. So to your point, it's not a once and done. Somewhere in between, 80% to 90% of the requests that they're working on is what the industry defines as a maintenance request. You can have some customers who are coming back to you every single week for an update. They opened a new account. They need to change a limit. They're setting up a new user. So you're going through that again. While it's a little bit shorter, the process doesn't change. You still have to go through all those steps I mentioned earlier.
So if you think about the scalability, it's not just how can I onboard that brand new customer in an easier way. That's really only 10% to 20% of your volume. You have to think about how can I create a repeatable process that's easy for our customers for these day-to-day maintenance or change requests that come in. Because you're right, Cheryl. It never stays static. Maybe once a week is too frequent to use as an example, but to say it's never going to change or it's once a year is way too infrequent. And this is where all the volume comes in for our financial institutions and really part of the challenge.
Cheryl Brown
So with such a painful process, you know, still being done with paper and multiple systems and rekeying, there's got to be a better way. There's got to be a better way. So, you know, that's one of the reasons I wanted to have you on the podcast today is that I know that you guys on the Q2 product team, you've been looking at this problem and assessing this problem and trying to figure out how can we help. So … automation. There's got to be things that we can do to automate the business services onboarding process. Ways that we can make this better. How can automation be a game-changer for this process?
Michelle Annett
Yeah, automation is the key to this process and making it scalable. And what we've been working on and what we’ve heard from our customers … we spent a year talking to them specifically about the automation process before we put our first hands on keyboards. And there's a lot of tools and there's a lot of focus in the industry around building these very robust workflows. You know, help me work through this. And what we heard from our financial institutions, particularly in the community banking space, is our teams are small. They already know what to do. So we don't need to give them a list of tasks, and we don't need a robust workflow. What we need is a way to … for example, instead of setting up a customer for digital banking and logging into multiple systems and navigating multiple screens and rekeying data and trying to remember everything that needs to be clicked, why can't I have a button that says, “Send this to digital banking?” And through automation, all of that information flows.
And so if you just can cut out one product at a time. So if it takes me today an hour and a half to set that customer up for digital banking, and I can take that to 40 seconds or less, that's a game-changer for our customers, and that's a game-changer for their customers. You think about … I mentioned the maintenance requests. If I'm adding an account as an end user of the bank every day or every week, when it comes to setting that customer up, you're not changing anything about the screens you're logging into, the systems you're logging into, and how you're navigating that. So it's really not less time than a brand new setup. But again, if I can do that in less than 40 seconds, imagine clicking a button and being able to set up hundreds of accounts at one time. Automation is really the answer and the game-changer.
But there is one thing I want to call out in the treasury space. The people who live in this space for many decades really, really love it. And one of the reasons they love it is because it's always changing, and no two customers are the same. And one of the reasons automation hasn't been tackled more aggressively is scenarios change from one customer to the next. Every FI has those larger or unique customers that they have to really make some customizations for. That's not automation. But imagine if 90% of your requests can be fully automated, then that same team that was spending hours on those repetitive tasks, now you can devote them to those exceptions. So when we think about automation, we also think about how do we get 100% or 90% of the work. And that's where you change the trajectory for your customers and for their customers, as well.
Cheryl Brown
So the Q2 product that you guys have been working on, it's called Treasury Fulfillment. So how does Treasury Fulfillment address some of this automation? Does it tackle certain aspects like you describe so that other aspects can get the attention that they need?
Michelle Annett
It does. It really tackles its job to be done. I talked about just a couple minutes ago, and I have a lot of passion around it, the ability to click that button. Really, though, the process starts ... You can only have a button to click to automate everything if you have a way to capture the data. And so that person who, in step one, is talking to the customer to understand their needs, you have to address their needs even though it's not a job to be done of the product, and you have to address their needs in a way that they want to use it. So you have to … we looked at this two-pronged.
So while our primary focus was the automation and the back office, we knew it had to start with the front-office team. So let's give them automation that they didn't even ask for. And what I mean by that is we've digitized their enrollment form. But for those products where we have automation in place today, when that salesperson goes to an enrollment form, they're no longer going to an enrollment form, where they also have a very manual process to key in the customer's name and their tax ID, and they're filling out this really manual form.
So part of the solution is to help manage that change management process that's so difficult and, quite honestly, I just don't have time for a lengthy change management. We're going to give them a prepopulated enrollment form. So when they start their enrollment form, it's going to be prepopulated with everything Q2 knows about that customer with our existing integrations. So instead of filling out 25 fields on an enrollment form because a customer wants to add an account and change an ACH limit, we're going to give them a prepopulated form so they can navigate to that one field to change the limit, and they can look up to their accounts in a database to pull them in. So they're also reducing their rekeying errors of their accounts. So we really went to market with: we're going to give the front office, your salespeople, your support teams, your branch managers, a way to easily capture the customer needs and make that process faster, as well.”
And then we have the second component that we want to give you a button that you click a button and say, hey, we just set up two admins, 10 subsidiaries, 100 accounts, ACH and wires with dual control, all in less than a minute. And from there we can make a real impact to these teams. But we had to really look at the challenge and the process start to finish to get both teams working together and understanding if we deliver efficiency for both, we can deliver efficiency for their customer, which can affect the bank.
Cheryl Brown
And that it allows a financial institution to differentiate itself in the market, right? If it takes two weeks to a month pretty much everywhere you go except for this bank can do it in what, a week? Less?
Michelle Annett
Yes, absolutely.
Cheryl Brown
Yeah. What a differentiator. I think, as a business owner, I know which bank I'm going to go with.
Michelle Annett
And the customer is happy. And all the teammates at the FI are happier as well because they can ... It relieves the pressure they feel to do the simple, and it frees them up to do those things that really require in-depth knowledge and hands on keyboards. So we say let the automation do what automation can do. And where there's excess complexity, the automation is going to free up your resources to work on those other things that can't be automated.
Cheryl Brown
Well, and free up resources to work on other things, but also possibly help a financial institution deal with something that, you know, a lot of the market is dealing with. And that's not enough headcount, right? Not enough skilled people to do the jobs that need to be done. And so how does this technology enable a bank to do more with fewer people?
Michelle Annett
Yeah. Gone are the days where our customers are asking us for technology to be able to reduce headcount. Now the question is: How do I do two, three, four times the volume with the same headcount? So it's really a very different question. And you just can't scale to where you want to without having automation in place.
A lot of FIs right now are talking about, you know, how do we grow in the small business space? Small business is really critical, and it is the backbone of community banks, for sure. But it takes the same amount of effort in this space to set up, you know, those four or five standard services for a small bank that may be paying a smaller fee, as it does for a large corporate that's paying you hundreds, maybe thousands of dollars each month. So to be able to scale in that space, if you can automate that and have a really easy enrollment form to fill out and automate that, you can scale that small business particularly, but you can scale everything.
But using small business as an example, you can scale it with the resources you have today. And let's not forget, Cheryl, it's not just that they have small teams and are asking them to do more, but we constantly hear no matter who we talk to in the industry, the secondary challenge is—and I remember this from my own career—if you hire somebody new in this space, it doesn't matter who you ask, they're going to tell you it's 6 to 12 months before that person is ramped up and has enough knowledge to do the manual steps. That's another place that automation can help you, so that when you're bringing on new people, the form is standardized. We have an admin portal that helps you configure it. It aligns with the systems you're integrating into. So they have a little bit of grace while they're coming on to be able to really learn systems, learn how these products work, learn the bank, learn their customers, and allow automation to carry them forward in their journey to a shorter ramp-up period.
Cheryl Brown
Let me ask you this question. As someone who has spent your entire career, you know, to your point, you love the treasury management services space. You've spent your entire career kind of focused on this area. If you were to be able to dream a dream, like what would you love to be able to do more? And how might some emerging technologies like AI—you know, everybody talks about AI, how can we practically use AI—what are some things that you would love to see further automated within the onboarding process?
Michelle Annett
Yeah, the number one, that thing that I'd love to see—and Q2 is going to start tackling—but really as an industry, we need to find a way to cut out all those processes by enabling end users, the customers of the bank. Today, if they want a change, say a new and updated ACH limit or add an account, they call the bank. The bank calls them back. They send them forms and that back and forth takes weeks. But where we have to get to, and the true north star of all of this is let's start with that end user. And this is, again, your middle of the road. And allow them to start the process and say, “I want this new service or this new limit.” And from there let's let chatbots … and you know, you mentioned AI. Now I'm really going to north star to help guide them to enter the right information, to be intuitive, intuitive enough to then display the appropriate agreements and disclosures and have them be able to accept those and have them flow into a document repository. Then have that request flow to the financial institution and let them be able to say. Yep, this one's simple. Easy. It's an account. Click a button and have it flow through to the source system. This one I want somebody to look at. They pick it up. But we really have to start focusing on automating every part of the journey starting from the end user.
We recently did a research engagement with some small business customers as we begin to tackle this self-service capability. And overwhelmingly they said not only did they like the ability to request it themselves without calling or going to the bank, but what they also said is, “I need to be able to do it on my time. I might be doing this at 10 o’clock at night and my bank isn't open.” So that's what really transforms the process, is if you can start at the beginning and continue to chip away at this automation, you know, they can really make a lot of impact into this because they can help guide people on, hey, you've got to answer these five questions. And that just prevents that back and forth or being able to provide predictive analytics to prompt that customer to request the change.
I keep using ACH because it's the easiest example, but at the bank, if I have a system that's telling me, hey, your customer is at 90% of their limit, imagine I having predictive analytics to send a message to that customer in their, you know, online banking and say, “Hey, we see your volume and we would like to recommend that you get a 10% increase. Would you like to apply for that now?” and have that roll all the way through. It should really be able to help us move this along faster because honestly, Cheryl, I talk to FIs and they are filling out the exact same form I filled out 25 years ago when I became a treasury sales officer, and it's time that we really focus on transforming this process. And I think AI is really going to help us make leaps and bounds faster than we would have otherwise.
Cheryl Brown
Yeah. I mean, it's so interesting that you say that same form from 25 years ago. Show me one business owner that functions the same as they did 25 years ago. I mean, not very many, right? I mean, business owners, especially small business owners, they're doing everything on the go and they expect their business banking relationship to mirror their consumer banking relationship. They want the same kind of agility. They want the same kind of ability to self-serve. And, yeah. And this is just a little small drop in the bucket of what the future business owners are going to expect from their banks, I think.
Michelle Annett
I couldn't agree more. I think we're finally on the verge of just transforming this process, and the FIs that can get out in front and make the change the fastest, and the fintech partners that can help them do that, they're going to be the trendsetters. And as you mentioned, even when it's easy, people don't change unless there's a real reason. So if people came to you as a trendsetter to make this process easier, they're going to be more sticky. We already know when they set up these services, they are less likely to go to another bank.
So it's a really exciting time to be in this space. It doesn't matter if you're the product manager or the bank, the FI, the people in the FI, or the end customer, I think the change is going to be really exciting and transformative, and we're excited to be engaged in this conversation and the delivery of these solutions.
Cheryl Brown
Well, thanks so much for your insights today, Michelle. I know faster onboarding is a goal for many financial institutions. So this is helpful information, and I'll put a link to some resources on the Treasury Fulfillment solution in the show notes for those who are interested in learning more. But Michelle, thank you for joining me today.
Michelle Annett
Thank you so much for having me. And I'm really excited that this content and everybody will be as excited as we are about being able to transform the experience. Thanks for having me, Cheryl.
Cheryl Brown
Absolutely. Well, that's it for another episode of The Purposeful Banker. A reminder to share your feedback on our podcast content at q2.com/podsurvey, and there's a link in the show notes. You can subscribe to the show wherever you listen to podcasts, including YouTube, Apple, and Spotify, and you can see our archive of podcasts at hub.q2.com/podcasts. Until next time, this is Cheryl Brown and you've been listening to The Purposeful Banker.