Build a Modern and Efficient B2B Payments Machine in 2025

Matt Ribbens: Welcome, everyone. Thank you for joining our webinar on building a modern B2B payments machine. We're very happy to have you here today with us and to discuss what state of the art looks like today when it comes to B2B payments, and how companies like yourselves are addressing and solving some of the most pressing and concerning problems today.
With that, let me introduce some of our speakers today. We'll go to the next slide.
I've got Jen Lucas, who is a leader in the payments practice and financial services technology space. Jen heads up the America's payments practice at Ernst and Young, and thank you, Jen, for joining us today. I know it's going to be a great conversation.

Jennifer Lucas: Great to be with you.

Matt Ribbens: I'm joined, also by my colleague, Matt Erickson, who's our director of communications for treasury management at First Citizens Bank. He's here to help tee up some of your questions. So, he'll be answering those and positioning some of the questions you put in the chat today to us so we can incorporate those in the discussion.
And I am Matt Ribbens. I'm the head of treasury product management for First Citizens Bank. I love talking about this topic, about the industry, where we're headed, both in terms of the products that we support and also the payments evolution that we're seeing in the industry and what that means ultimately for our clients and how we can help you be successful.
So, if we go to the next page, we'll talk a little bit about our agenda today.
We are going to talk a little bit just in general about what does modern mean, what are we talking about before we dive into these things.
We're going to do a little interactive poll. We'd like to get some feedback from you guys as to what's holding you back from becoming more modern and what are some of the challenges you're faced with today. We'll try to weave those in throughout our discussion today, in some of the trends that we're seeing. And, also, we want to just talk about, again, sort of five key trends that we're seeing, but both between, First Citizens and EY as it relates to what it what it means to be a modern CFO, treasurer, and what are the things that we're doing to be successful in that space.
So, we've woven a number of questions and responses, into the session today. You’ll be able to have an opportunity to also earn credits for CTP or CCM, if that's what you're earning credits for today. So, listen in closely. We'll be answering a lot of the questions you'll see in the survey at the end.
We also do have a Q&A tab, so you should be able to see that. So, feel free to email your questions as we're talking about these trends or before, and we'll have an opportunity again for you to take that quiz at the end of this webinar today. And if you get an eighty percent or higher, pass on the first try, you'll be, eligible to receive the additional CTP credit. So, I think with all the administrative stuff out of the way, we can kind of dive in.
So, I'd like to, you know, first just kind of go to what does it mean by modern? So, if we go to the next slide.
What Jen and I were talking about when we put this session together, it's not necessarily modern has to be bleeding edge or even highly advanced.
We're really talking about just, again, leveraging techniques that are newer and even ideas that are newer, the things that we're seeing in the industry now that could really help you improve from where you are today. So, we hope that as we're talking about these trends and discussing them with you today, that you'll lean into some of these capabilities for your organization and help to modernize your AR and AP functions.
So, Jen, if I can bring you in for the next slide.
We do have some quick poll questions we're going to pop up in just a moment.
But if we, on the next page here, we'll have, again, a couple of areas we think that might be some common pain points.
And, maybe you could just kind of give a little bit of your view on these while we pop up the poll, and I'll also just encourage you if a couple of these are pain points for you, go ahead and click more than one.
But, Jen, what are you seeing here?

Jennifer Lucas: Yeah. We, we kind of came up with the usual suspects of what we're hearing from our clients and their clients, the corporates as well. I think you see the number one thing there in fraud, and we're going to talk about that today and how to combat that. But a lot of these things have transparency, certainty, cost, all really come down to, in my opinion, a lot of data availability. And so, what I think about the modern payment system, that you, laid out for us so well, Matt, is thinking about elements that data can help. The connectivity of the pipes and the data that flows through it to really solve some of these problems. So, I'm really excited to see well, one, I'm interested to see what, our viewers are thinking about and are prioritizing, but, also, I'm really, happy to be able to talk about how we're seeing the industry attack some of these challenges.

Matt Ribbens: That's great. And I think we have our responses here. So, we got a lot of quick responses, so thank you all for joining us in the interactivity of this webinar. So, Jen, it looks like fraud, maybe unsurprisingly.

Jennifer Lucas: Is that the witness there, or no?

Matt Ribbens: Paper based process I see is up there. Lack of automation, being kind of two in the forty percent range. We've got two in the three in the thirty percent range, cost, uncertainty of delivery or receipt of payment, and data availability. So, you kind of hit that on the head in the beginning. And then complexity of information systems, which I could almost probably tie with some of the data availability and challenges there too. So, thank you for, for being willing to share your points of view on the poll today.
We'll go ahead and close that out, and that'll help us lead into one of our first trends, Jen. And I know, you know, as we talk about fraud, I think this touches on it. But, also, you know, there's some more things around timing of payments and certainty around payments that we saw in the polls. So maybe that helps define the smarter payment cap capability trend here.

Jennifer Lucas: Sure. So, one the number one trend that we wanted to hit on doesn't mean it's the most important, but it's kind of one of an exciting one that both First Citizens and EY have been, very involved in is just the smarter payments capability.
When I think about smarter, again, back to information and transparency, but also the concept of programmability.
And two, capabilities are in the market. They're not emerging. To Matt's point, we're not talking about, you know, intergalactic change here. We're talking about things that are available today.
One is an immediate payments capability, and one is a virtual cards capability.
I'll talk to hit those really quickly just to define them and really talk about what we're seeing the market. Immediate payments is really real time payments or FedNow. Those two are fairly interchangeable from a functionality perspective, but those are rails that enable real time clearing and settlement between two entities.
But the I think we have spent a lot of time thinking about the speed of payments, and a lot of you are like, oh, why do I want to part with my money quickly?
The opposite side of that is you like to receive it quickly and have certainty. Really, what's here and what makes it smart is not the speed, it's the information.
Did I send it? Did I send to the right person? Did they receive it? What input what payment is this apply how do I apply this, back to my, my invoice system?
How do I make sure I have recon? So those all those features and functions, and a lot of controls and security are built in to make it a smarter product. Another one that's highlighted here that we see a huge uptick in adoption is virtual cards.

And they think about programmability and that need for control. Many of our corporate clients want that control. I want to be in the driver's seat about what's happening when it's happening. So virtual cards allow really to the purchase ability to program and use, a credit card, and but you can it could be only available on Tuesday. It can only work for this amount.
So, you really can create a lot of controls there. And so, when I think about what we're seeing in the market and, frankly, what First Citizens out there is, you know, a capability to really create bring together that data transparency, speed, and programmability altogether. And we're seeing really exciting use cases here that either improve costs, improve security, and frankly, grow revenue.

Matt Ribbens: That's great, Jen. And I think as you mentioned, you know, as First Citizens, we've been on real time payments now for a while, and we're continuing to see a rapid growth and adoption in terms of receiving real time payments. We are working on, introducing the ability to send real time payments in 2025. So, we're very excited about bringing that to all of you in the near future.
And virtual cards, as you mentioned, are definitely kind of here and now. And, not only with certainty and transparency, but I remember there was in that poll a little bit of concern around cost. Obviously, payments aren't free.
There's a process. You know? There's a lot of infrastructure that helps support payments. But the interesting thing about virtual cards is the ability to earn a rebate. So if you are looking at managing costs, virtual cards could be a great solution to be able to open that up for so if you have a commercial card relationship with the bank and you haven't really explored virtual card options, that's really just an extension of that commercial card program, and we can certainly talk to you more about that.
I think we had a case study there, Jen. You wanted to share a little bit of maybe Yeah. How do you use a real time payment?

Jennifer Lucas: Yeah. And I let's move to the next slide. And that point about cost is really an important point because I think in the past, payments have been thought of thought of as a cost of doing business. How do I get money in and how do I get money out?
But what we're seeing in this use case, which is a real-life client, is the ability to use payments to grow revenue and attract users to a platform. So, the use case here is think about health care and supplying labor to the health care economy. So, think about the graveyard shift, the Fourth of July holiday weekend. It's always difficult to attract nurses and other health care workers to those shifts.
This client is embracing the gig economy and brings the health care industry that, you know, the buyers and the suppliers, the labor force together to create, you know, to schedule and provide gigs for health care workers. Well, they use real time payments, the ability to get paid instantly for a shift to incentivize people taking the most unattractive shifts. So, hey, Fourth of July weekend's coming up. If you work this shift, not only do you get two x or double time, you also get instantly paid and you get a bonus that you get paid out as well.
So, using that instantaneous, not having to wait two weeks for a delayed, you know, experience, but getting paid instantly, helping that health care worker with cash flow, but also making, making sure that you have the supply to meet the demand of your clients, which are the health care workers. So, this is a real life example, leveraging real time payments in order to create, you know, a platform economy and help buyers and sellers come together.
And, really, this is not about cost. This is not about saving cost. It's really about growing and growth. And that's what really, we're seeing our banks really, engage with their clients about it. It's a growth discussion versus a different payment type that rides a different reel that costs a different amount.

Matt Ribbens: Yeah. That's a great point you bring up, which is, you know, if you think about health care or we're also seeing this in sort of the restaurants or a quick service restaurant space as well. You know, payments are maybe thought of as a cost, but if you think about the cost of turnover or you think about the number of patients you can now accept, if you can get those shifts filled, that actually has a real business ROI on it. And so, it's you know, for fast food, for example, doing a daily pay kind of option is a differentiator and really helps, some of those companies reduce the number of, employees that reduce the turnover rate in a material way that that has added benefits of the company. It retains some of that knowledge. It retains some consistency, reduces training costs, but, you know, it may cost a little more to do that daily pay option. But it’s really having that strategic conversation about how can instant payments really make a difference in your business.
So, with that, let's see if we have any questions, Jen. Does that sound like a good stopping point?

Jennifer Lucas: Yeah.

Matt Ribbens: I mean, so Matt, I'd love to bring you back in.
Matt Erickson, are there any questions that have come in so far?

Matt Erickson: Yeah. Thank you, Matt and Jen.
As a reminder, you can submit your questions in the Q&A tab, and please include your emails so that we can follow-up afterwards if we don't get to it during our session.
The first question today is, and I'll throw this to, to you both. What is the biggest threat to B2B payments in the current landscape?

Matt Ribbens: I heard that correctly. It sounds like the, the biggest threat to B2B payments in this landscape. So, I think one of the one of the interesting things we're in an interesting period of time with a lot of innovation in the payment space. And, Jen, I think you've seen a lot of this and been involved in a lot of this as well.
There's been an explosion of digital payment options, and so that's been a great thing.
One of the risks to the success of those is probably just, I would say, inertia and still writing checks and not adopting or embracing some of these capabilities. So that's probably a threat to some of the digital capabilities, but there's also, you know, just a lot of options out there, and so I think it's really good to have a bank partner or consultant or somebody that you work with that you can also kind of lean into. Where are the where are the opportunities for you and your business to grow, using these different payment types? And what are some of the maybe the risks or, you know, hidden costs that you need to address too? So, it you should try to look at your payments, holistically and really, again, embrace the digital wave that we're in right now. I don't know if you have any other thoughts, Jen.

Jennifer Lucas: No. I think we're good there. Let's move on.
We've got we've got four more trends to go.

Matt Ribbens: Okay.
We got great examples here.
We'll bring you back for some more questions. So, feel free to continue to, send those to Matt, and we'll try to capture all those today. Alright. Well, let's go to the next trend here, which is that we've seen a growth in ERPs, and we'll call it talking to banks. And so, when you hear many of you are probably familiar with the term API application programming interface.
You may have heard this in in different consulting, papers, see it written in different consulting papers here in different conferences. There's a lot of interest, in APIs, and APIs have been around for a while.
They definitely have been sort of a common language between, you know, machines talking to one another. But we're seeing it now kind of shifts from internal APIs and, into more of external API connectivity.
And if we look at some research here on the top right by Datos, you can see that, you know, large companies, like your yourselves on the line today, really feel it's important to be able to utilize their ERP system to run banking operations. So, it's a growing, you know, opportunity for both ERP providers and for banks, and, clearly, its what clients are asking for. So, we we've been listening to those trends and seeing those trends for a while now. We also have seen, you know, as the bank has explored, exposing APIs externally, we find that there's a lot of clients that, again, depending on the size and the resourcing of the team, they may not have all the resources to develop to our APIs and develop to other bank APIs or other providers that they need to. It's a pretty extensive technology exercise.
We are seeing now in this in this space a trend of ERP connectors, which is really enabling, folks like, First Citizens and other banks to work with ERP providers to actually create an embedded experience so that it's a, an ERP plug in or connectivity that uses either APIs that we offer or can even use SFTP, transfer capabilities to really make that ERP become the way you operate with your bank in terms of sending payments, receiving payments, handling exceptions.
And we see those are really solving a couple big pain points in the industry. One is, you know, if you have multiple bank relationships, you have to go to different multiple bank websites, and sometimes that can be a bit challenging. You have that swivel chair of having to go between the bank website and then going back to look at what your ERP system says you have and reconciling the two. So really creating an integration, it reduces sort of the friction in the back office, but it also helps, just get to that one source of truth. So, we know that everybody wants to know where we are from a cash position perspective, where we are with working capital.
Having that integrate to a bank through an ERP plug in is something that we see as a growing trend in this space.
So if we go to the next page, I've got a case study I can talk a little bit about, which again is another client here in the case of a large manufacturer, and oftentimes, manufacturers or others that have multiple, you know, facilities in different locations may have different bank relationships or different credit requirements where they have to have multiple financial providers in that space. But as they were working with these providers and providing their payments, they were having to go again multiple systems. They had to, you know, pull from different systems to get, current day or previous day reporting, or they would get it, in some cases, through an SFTP delivery.
With First Citizens and with other banks partnering with ERP providers, we're able to create, you know, that connectivity through an ERP plug in, which again for them, saved a lot of time and effort in terms of improving the back-office visibility into payments. It really created that operational efficiency, better visibility, and again, faster issue identification.
Meaning, they could spot those faster by operating in their ERP.
Also, again, some of the process that you've probably designed internally too, if you have a secondary approver, a lot of that can be done through that ERP, system. And so, it doesn't require you to go through a separate process just to deal with a different bank relationship. So, we see this, you know, being a really popular option, particularly for companies that may be limited on the ability to write to certain or read from certain APIs. So, Jen, are you seeing that as well?

Jennifer Lucas: Yeah. A hundred percent. What I love about this trend and this capturing of the, of this experience is it's kind of the consumerization of finance and that, you know, as a consumer, you know, I have a lot of banking information on my phone. It's where I am.
It's how I operate. And what we're enabling here and what the banks are enabling here is a similar experience. They are embedding themselves into your experience as opposed to requiring you to go to them. And so, this whole connect tip secure connectivity, secure pipes, and meeting you where you are, it makes, well, life much simpler and allows you to aggregate a variety of information to work the way you want versus the standards that each individual each individual bank has.
So, I love this whole consumerization activity that's happening in the finance industry, and I think the banks are really, with ERP connectors as well as getting to you don't have a big massive ERP system. And we are talking about the ability to integrate with QuickBooks and smaller, other kind of, central finance functions. And so that's really where I see we harness the power. It doesn't matter what size of financial institution you are.
It can really power and take that data from your financial institution and flow that into your kind of, basically, your central nervous system of your company.

Matt Ribbens: So, let's maybe take a pause. And, Matt, do we have any questions that have come in?

Matt Erickson: We do. Thanks, Matt. First, for the audience and for those that might not be aware, can you sort of take a step back and just define what an ERP is?

Matt Ribbens: Yeah.

Sure. It's you know, again, ERP stands for enterprise resource planning solution or system.
A lot of times, you might think of those as accounting systems too. Some people refer to them as that, but, generally, an ERP is broader than just accounting.
It can help with inventory management. It can help with, supply chain, monitoring, and, again, it can cover a number of things from an organizational standpoint that you want to monitor and be able to have insight into. So that's where ERPs have kind of grown through the years and the use of sort of the appreciation of their functionality and capability.
And, again, being able to pull in bank data information, being able to submit payments, and sort of sort of send those through in ERP, file format has been pretty common for a while. But now these plug ins even give you a more direct connectivity to the bank.

Matt Erickson: Thank you, Matt. Yeah. One more before we proceed. You know, given fraud is always a hot topic and important, for us to cover, what do you think about fraud and the risk prevention given the speed of payments that are now offered?

Matt Ribbens: Good question. And I think, Jen, I know, faster payments equals faster fraud.

Jennifer Lucas: That's all we do. I don't agree with that because checks have the highest fraud rate going these days and those aren't those aren't terribly fast.
They're faster than they used to be, but they're not fast. So, I think about, there are a lot of controls, associated with real time payments that we talked about before that don't exist in other payment types. One of them is pushing a credit. The user has to authenticate and send good funds to the recipient.
So, the funds have to be available. You have to say, I am Jennifer, and then you have to send the funds to that. So, you know, from a controls on the send side, there's a lot of inherent controls there. Then on the receive side, you know, token-based payments, knowing who your customer is.
We're going to talk about trust and verify on the next one. We could talk about ways that can help there to make sure you're paying the right person. But inherently, the threat vectors associated with a push payment in the real time payment space is much smaller than what we have with open debit and frankly check paper, you know, being mailed about.

Matt Ribbens: Very good points. Yeah. Yeah. We will touch on more fraud, Matt. So, I think we can hit on some more of those.

Jennifer Lucas: Great transition, I think, too. I think that's or coming up next. Yeah. Soon.

Matt Ribbens: Yeah. Let's go to our third trend, which is around emerging global payments data standards.

Jennifer Lucas: Sure.
So, look, as I mentioned before data is kind of the connector of making all these modern payment systems work and a lot of times a lot of the struggle particularly in cross border payments is that we've got a lot of different languages being used.
Matt talked about different API standards and connecting unique and having a technology team that that can just communicate with a variety of systems. In payments, we have we had the same thing. But more and more payments are moving towards an ISO 20022, doesn't that sound exciting, standard. And ISO is an international standards organization. They do everything from standardizing food quality to cybersecurity protocols. So, it's a way of creating, getting a variety of people within an industry to agree to a common set of rules. So, ISO 20022 is the standard for payments and financial institutions.
And if you think about it, just commonality of language. Field A has this information. Field B has this information. If you can just have every payment type or most payment types flow with that type of instruction, then you have a lot more transparency, a lot more enrichment, a lot more efficiency, and a lot less confusion associated with payments moving across board or even domestically.
The financial institutions including First Citizens have been hard at work at reaching, compliance with these standards so that they are part of that. And then once the banks become, have the standard set and the messages flowing, there will be a lot of downstream benefits to their customers.
But really, if you think about the chaos, sometimes it happens in a cross-border wire and the information that, you know, has to be repaired, fixed, or get through AML and OFAC and all of those other security checks. If you can streamline that so that Swift, Chips, Wire, all the different rails speak the same language, you're really reducing a lot of the latency that we see and, frankly, a lot of lack of transparency related to where is my payment and did it happen.
So, we're really excited about that, and I know, Matt, this is really a high priority for First Citizens.

Matt Ribbens: It is, Jen. And, as you mentioned, we have both, Swift, underway where we've already migrated off of or we've got sort of running in parallel to the MT standard as the MX standard, which is the ISO format. So, we've been in in that mode for a while now. We've also got the Fedwire deadline, which is going to be March 10th of next year. So, we just want everybody to be aware all banks, including First Citizens, are working towards that deadline.
Again, driven by the Federal Reserve, they had, put out a couple different proposals of how to get there and move the industry to a common standard.
So, it was originally targeted for November of 2023 in a phased approach, and then they decided to change that up and go with a sort of a big bang implementation on March 10th of 2025.
For the banks, it's been a lot of work, but I think, you know, the work is, is going to pay off in the long run-in terms of the ability to have better data, to be able to look at data, and be able to harmonize that across payment types. And so, a couple that were mentioned here, Chips, Fedwire, and Swift are all sort of wire-based types of payments. Instant payments, like you mentioned earlier, Jen, like RTP and FedNow are actually ISO 20022 native. They were designed that way. So, there's going to be the ability with the data, to be able to switch payment types from one to the other without losing any information. So, there's some opportunities there as you look at your choices of payment types that you'd like to pursue with your trading partners, and then being able to offer multiple options, without necessarily having to map to multiple formats.
So, I think we had a little case study on the next page, that I'm happy to talk a little bit about, which is, you know, again, this is a case of an airline, again, sort of global in nature.
They have multiple countries that they service. They have, obviously, you know, fleet parked all over the world. They have people all over the world, fuel costs, other things that they have to manage.
One of the things that they had, again, was to struggle with, from a from a treasury perspective was managing these multiple proprietary formats, cross border payments. Jen, as you mentioned, if you got concentration accounts, things money you're moving across border to make these, payments happen and settle.
It was it was challenging. And so, ISO has actually been again, well, it has been more of a regulatory kind of lens to it or an industry kind of lens to it. It really did help them lean into ISO. And so, a couple of things that they did, they were able to, again, use that common ISO format for payments, which helped them streamline some of the payment complexity they had. But the next thing they did too was also ties back to your comment earlier about data. So, a lot of you may be familiar with a BAI file or if you're using Swift, maybe an MT940 file. They went and made the shift to go towards ISO, which actually is a there's a different mesh and set, which in which in ISO is the camt.053. It gets kind of technical.

Jennifer Lucas: Amazing.

Matt Ribbens: I know. So, if you can move to a common, standard for collecting the data too, you don't have to worry about getting a BAI file here and a swift message there. You can now get ISO messages to report on the status of your payments. And so, the camt.052 replaces the MT942, so it's a bank to customer data report.
Again, the MT940 could be replaced or the BAI with the camt.053. So, as we see the migration happening to ISO across, multiple payment types, there's ability to now pull in information using that ISO native format.

Jennifer Lucas: And that one thing that we, you know, I sometimes cocktail conversational about ISO. Be careful. One of the things I think I talk about is think about if you could just Google your payment. Like, what happened here?
And think about if you could do that, that's what you have to have a message set. You have to have data that you understand that could that a search engine can find. Right? So, if you think about it that way, that's how it kind of crystallizes a lot for those that are not in the, you know, as intimately involved as we are in this.
It's thinking about that modernization of being able to know what's going on with a payment and what's underneath it. Invoice details, you know, did I you know, who I'm paying, where I'm you know, net thirty, net sixty, whatever it is. It's that Googleization, if you will, not endorsing any customer here, but, that Googleization of payments is what ISO standard can help with. Yep.

Matt Ribbens: And the other thing that I don't want to lose in that too is also with the better data that's being passed about the payment remittance information. There's more that businesses can use that data to help reconcile payments as you mentioned. But, also, banks are really particularly interested in this too because it should help in terms of fraud screening, BSA AML screening. It should help us in being able to resolve those issues. So, if you've ever had a wire that's been, you know, being reviewed, sometimes it's because of data formats and it's trying to find information around it. If that becomes more harmonized and streamlined, those reviews can happen much more quickly and hopefully, again, reduce some of those false positives that we've seen.
Alright. Well, let's go to oh, actually, Matt, how about before we jump to the next trend, any questions on ISO 20022?

Matt Erickson: Thanks, Matt. Just one here. What, you know, can I as a company do to be prepared for ISO?

Matt Ribbens: It's a good question. And I'll maybe I can start, and Jen, feel free to jump in. I feel like for ISO, there's been a lot of, as we mentioned, work going on within the banking industry to be ready for the standard, to be able to send files to the Fed and to, you know, the clearing house and others that that operate these networks, in this format to be able to be ready for it. So, the one thing I would say is if you haven't really heard of ISO 20022, it's probably good just to learn a little bit about it, just the basics. You don't have to become an expert overnight or by March 10th.
But I would say after that point in time, there's going to be data that you may be able to provide in the payment, which may come from your ERP system. So, if you are, working with an ERP, have a conversation with them as well to see if they're ready for this and sort of how that's going to help you facilitate your payments going forward, how that may be something you can take advantage of as a recipient of these payments.
So, it may help you in terms of inventory planning. It may help you in terms of other aspects about the business that that really the proprietary formats were limited in the nature of what they could carry. So, there may not be as much information you can benefit from. So just, you know, from, that perspective, there's quite a bit more, that they'll get from a counterparty perspective in terms of data. And, so just, you know, starting to think about how could you use data better now that you have access to this.
For example, there's, you know, now about fifteen hundred fields that are in the ISO 20022 format that now can carry data and more characters than were possible to be carried in in proprietary formats of the past. So, there's going to be more data with payments that you can now take advantage of going forward. But in terms of March 10th, there's not something you need to be doing hard and fast other than just probably getting prepared for what that could mean for your business.

Matt Erickson: Great. Thank you, Matt. Back to you guys. Okay.

Matt Ribbens: Alright.
Let's keep where I think we're right on schedule here in terms of timing.
The next topic we wanted to dive into does relate back to fraud. So, you know, sort of big and bold right here on the right-hand side. Check fraud is our number one target for, fraudsters, and I think you all have probably experienced this or have had attempted fraud.
Actually, if you look at the AFP survey, if you've, been up, members of AFP and you see the annual fraud survey, in 2024 in their report, they said 80% of organizations were targets of an actual or attempted fraud attempt in 2023, and that was a 15% increase from the prior year. So, you know, I like to say this, and I don't mean it in a in a negative way, but if you haven't had fraud, then it's just a matter of time. It's not necessarily that that, that you're going to be able to avoid it. And that's really where we think, you know, sort of on the receiving side if or sending side, if you're writing checks, and a lot of you are. And, and according to, again, the survey, I won't call anybody out.
It said checks continue to be and this is again from the AFP fraud survey. Checks continue to be the payment method most susceptible to fraud, as Jen mentioned earlier.
And 70% of organizations using checks have no immediate plans to discontinue their use. And so, when you're doing something that we know has some level of danger, we would also recommend you take some precautions in that. So, if we look at things like payee positive pay, that's something if you don't have that for check writing, you should highly consider using payee positive pay. If you're sending ACH payments again, you've got it off paper, but you're moving to electronic, definitely incorporate ACH positive pay.
Standard account controls, things that you can do, dual authentication.
Some of the dual controls in terms of approvals are really helpful in catching fraud or preventing fraud, particularly when you see those things like business email compromise where they impersonate somebody within the company. And if you've got one person that can push the button to send the wire and you don't have a second person that can review it, those are where you see those losses kind of pile up. And then as it relates to some newer things we're seeing, you know, there's integrated payables. So, for, one file to be able to send to the bank, that once the file is produced, it can go and send payments out by ACH, by check, by wire, and in the future, instant payments as well. It creates one file, and that file can then be used to also populate a positive pay file so that you can validate when those items do come in for payment within online banking, or commercial advantage that we have today.
To be able to validate those products are those checks are legitimate and, an exception to those items that that don't fit the profile. So, if they're not issued through integrated payables, those will pop up as exceptions if there's no file to map to. There are other things even in the cyber world of IP white listing. So, if you want to control the, the access, to where those systems originating payments are limited to.
So, if you're if you're, if your headquarters and your CFO sit in in Toronto and you want to make sure that any payments coming from your company are coming out of Toronto, you can white list those IPs. So, if you have a payment that's initiated out of Poland, you could catch that and, and stop that payment from happening. So, there's a number of those. And then there's also this this newer trend around account validation services.
So, when you're sending a payment, we know the first thing that that people try to do in a business email compromise scenario, is to tell you to send in the payment immediately or maybe in some cases send it to a new bank account because the vendor you've been working with for many years has changed banks.
And that does happen for legitimate reasons.
But it's also the choice of fraudsters to take advantage of that, knowledge, or lack of knowledge about the truth to that statement. So, if you can use something like an account validation service, a bank can provide you with that ability to validate the, routing and payment instructions. And we can go and call that to say, hey. If this is ABC company that you are supposedly paying, and ABC company is not listed as the owner of the account where the recipient is, that may be a sign that that's fraudulent.
And so, there's some of these new services that really help to not only validate the payee, but really help give you some confidence around the potential that you're, you know, catching what might be a fraudulent transaction in the in the process of it happening. So again, these really all help to reduce fraud, help to reduce account takeover, and reducing the errors. Again, I think that's another part of account validation that's really an interesting use case. But, Jen, I think we have a sort of a case study that you wanted to introduce, I think.

Jennifer Lucas: This is kind of a two for one, especially if we move to the next slide. It kind of encapsulates the ability to push a payment, maybe a real time payment, and account validation services. Can we move to the next slide, please?
So let me set the stage. Insurance company, think about, you know, crisis.
Your client has, you know, needs, you know, the claim funds in an emergency situation.
You know, the easy button is write a check. Your obligations are done, but your customer is still sitting there with an acute problem.
They're not at home to get the money. So, what can you do? Okay. Well, I don't have their account information. How do I know it's Jennifer? How do I get that? So, as Matt mentioned, there are abilities and capabilities that financial institutions are investing into to help you, deploy capability so that you can validate it's Jennifer.
Think, for example, okay, Jennifer. You know, we're going to help is on the way. I'm going to serve up a screen for you, and I need you to put in your payment credentials and your choice of how you want to receive money so that you can access it. And then what I do is I work with my financial institution and other fraud capabilities to make sure that's Jennifer, that's her IP address, that's her mobile device, that's Jennifer's account number, her name is associated with that that financial institution, and I have a secure connection.
So, I feel more comfortable that it's Jennifer, not someone impersonating Jennifer to get those funds. And we're seeing this in real life in the insurance industry. But if you think about that as an example, it's applicable in a lot of different spaces, whether you're trying to move money to a new client or in real time to an existing client or, you know, as Matt mentioned, a change has happened and you want to create controls that, you know, you know it it's still going to the right, recipient.
So, we really think about this trust but verify being infused into your process and into your controls and not just write the check and hope you hope it gets to the right place.
We've got a lot of challenges in the market. You know, as I mentioned before, the reason why check fraud have skyrocketed is because they're an easy target.
We've got people intercepting checks at the mailboxes. They have keys to the mailboxes. There's technology to wash those out and change the payee.
So, we see more and more controls being, moved into the electronic payments to make it more user friendly and more certain. And that's really where we think about, the next phase of this. And so, I really encourage you to work with First Citizens, work with your financial institutions on some of these capabilities that can bolster your confidence in payments.

Matt Ribbens: That's great. Matt, let's go to you to see if we have any questions on this topic.

Matt Erickson: Yeah. Thanks, Matt.
One question here. How do we incentivize people that, to pay you electronically and move away from checks?

Matt Ribbens: Yeah. That's a great question. I think that's a bit of a challenge. So as Jen mentioned, it's sometimes it seems very easy to write a check, and it and it is, especially if you don't have the other party's routing and transit number. You don't have, you know, the ability to send an electronic payment or you've not talked to them about setting it up. So, one of the first steps is as you're negotiating with, you know, a new a new partner or even existing partners is probably to revisit those, trading partner conversations to see when you're talking about maybe terms on invoices or if you're talking about a new relationship, definitely introduce the idea of paying by, by ACH or paying by card. Really negotiating maybe what terms and conditions you want, but also what payment types that the vendor is willing to accept.
Because that's one step is eliminating the paper is really getting to know if they'll accept a different type of payment.
That may not be the case in all cases, so I think you can do your best there. I think the other piece to remind folks about if they're really adamant about checks is to go back to, you know, just to what we saw, the number one source of fraud losses is checks. And there's also, you know, beyond fraud, a lot of hidden costs there.
So, again, if you're receiving checks and you're thinking, I'm fine taking a check, well, there's things that you're paying for. Maybe it's either internal labor to handle those checks and process those checks. It might be you're using a bank provided service like a lockbox or you're using remote deposit, which again has a cost, but there's, again, benefits in using that, again, when you're receiving checks and you can't maybe influence the payee to pay you differently. But I think there's a lot of hidden cost in check, you know, whether it's the time that you've got mail float, you've got, checks being lost or having to be reissued, checks that are, again, just, again, out there in the in the ether that might, you know, be lost for days.
The old adage, the check is in the mail. You know, some people like that float and others that are receiving it, obviously, that's not a not a great scenario.

Jennifer Lucas: Even the post office is saying don't put it in the mail.

Matt Ribbens: And I think the post office is also investing in digital, keys now to lock the post office because those keys were being copied, sold, and, you know, it's a sad state of affairs, but it is a high reward opportunity for those that choose that path.

Matt Erickson: Great. Back to you, Matt.

Matt Ribbens: Alright. I think we are in the home stretch with our final trend, trend number five, which is improving consumer and business collections. So, obviously, we've come through a rate environment that was very low for a very long period of time, and now we're seeing rates, you know, rates went up, and now they're coming down a bit. But as rates actually kind of normalized and will normalize, I think there's a premium now on improving your collections process. So, whether it is a business that you're operating that does a lot of consumer business, then, you know, this will be, you know, right up your alley. But even from a business standpoint, there are a lot of businesses, that still, you know, that receive checks and receive other types of payments that we talked about.
And you've got solutions that we can offer that will help you expedite those payments like, wholesale lockbox, for example.
But one of the things I just wanted to share here on the right was the diary of consumer payments. So, if you are in the consumer payment space and you're collecting from, consumers that work with you, you can see that there's been a change and a shift in behavior.
You saw, you know, back in 2016, probably on the top here, you know, fourteen payments that they would make on an average month were cash payments. Now we're down to seven. So, cash is not zero.
So that's another service we offer as cash vault services. If you have a cash collections business, you know, we certainly are happy to talk to you about it.
Check, from a consumer standpoint, still pretty low. But you'll see, you know, over time, the number of payments being done by a credit card or being done by a debit card have increased. So, from eight payments in 2016 to fifteen for credit and from twelve to fourteen in debit.
And then you've seen, as Jen mentioned with her phone, an explosion in a bit of, mobile payments and mobile apps. And so, there's an interest in being able to pay, you know, via mobile app, for example, or an ACH payment. So, using a maybe pay by bank kind of option.
So, we're seeing those payments, you know, number of payments increase, and then you're seeing the, the share of payments by all payment types, you know, on the bottom here. So, one of the things that it's just really important to remember is if you're trying to, expedite your collections, giving your customer more choices of how to pay you can be a really valuable tool.
So, Lockbox, as we mentioned, is one solution to be able to capture those check payments, particularly if you're a utility or if you're a government agency. Lockbox can help you collect those payments, receive those deposits more quickly. And First Citizens, it's actually made a pretty large investment in our lockbox capabilities that that, really have up leveled our digital capabilities in that space and offered several more locations than what we had before.
Electronic bill payment and presentment is another, area where if you can offer the ability to take both, an ACH payment, so a paid by bank option, or even, again, looking at the preferences of using a card, whether it's a debit or credit card, our merchant services team, partner with the treasury services team. We've got an EBPP solution that allows you to create a website to be able to capture payments, to get paid faster, to give them an option to pay you other than check. And sometimes these are great to use in combination with one another because, again, giving your consumer more choice really does result in a better, collections process. But, Jen, what I don't know if you have any thoughts around that as well.

Jennifer Lucas: When we talk with large providers of, like, utility services providers, telecommunication services providers, this integrated experience is becoming more and more important.
And when you mentioned the website creation and that user experience to be able to be easy to do business with. This is the number one thing is I need to be easy to do business with, whether I have a subscription-based service, which is a kind of a set in, forget it, or if I have an ad hoc one off, you know, bill pay or one off payment. I want to be easy to do business with. I want to have a good impression, and this is an opportunity for me to also cross sell. I want to bring my customers to me to interact with me. And one of the number one ways to do it is complaints, buying something more, or paying you. Right? So, let's make them positive, paying you and buying something more.
So, we see a huge amount of, a focus on that electronic bill payment and presentment space, particularly in that kind of consumer, you know, business to consumer space. And we're seeing things and investments and innovation on, like I said, subscription-based services. So alerting people when a subscription is due, when they're going to be drafted or, you know, debited or credited, you know, when it expires, allowing people to control that.
Another really interesting thing is integrated. So, we're seeing I have to be careful because it might be around here, but an Alexa like, command set of integrated voice so you can ask Alexa to pay your x bill. And, and so creating that convenience so that customers have, you know, ability to interact with you in the least intrusive way, like, making it as seamless as possible for you to get paid from them for the services that you provide is really where we're seeing a lot of focus. And the interesting part is, on the bank side, the banks are not just engaging with the payments operations team and the CFO office. It's really the marketing and digital team of that business because it's becoming a growth vector and a customer service and experience, digital experience versus just making a payment.
So, it really would encourage anyone that's looking at ways of integrating choices to think about a variety of these because it really does change the dynamic of just getting a receivable versus creating a unique experience.

Matt Ribbens: It's a great point, and I didn't mention. But with the EBPP solution, you think of your standard maybe website you go to make a payment, but a lot of those are mobile enabled. A lot of them, there's even some where you have a text to pay capability. So, again, just making it convenient for the end user to make a payment to you is important. And then I think you hit on another great one, which is integration.
So, again, if, from the treasurer's office or CFO's perspective, the more of these options you add, the more, you know, more ways you have to collect. So, if you have an ability to pull all that data together into an integrated receivables file, you can now see that, hey, I got, you know, cash from these ten stores, and this is my cash position. I got these number of checks through the lockbox. I got this number that came through, remote deposit. I've got this that come came through the electronic bill payment present platform.
Creating an integrated view of that is really valuable as well. And so, First Citizens is also looking into, sort of in the future, how do we pull that in a way that would create a good client experience as well.
Let's go to maybe a case study, and I think you might have one, Jen, as well, on the electronic bill payment, presentment on the next slide.

Jennifer Lucas: Yeah. If you could move to the next slide.
So, as I mentioned, I actually kind of, overshared in the previous slide that if you think about a utility company, a telecommunications company looking at creating that unique experience.
We had a client that was really trying to improve the digital experience, kind of move customers frankly from a bank bill pay application where they go to their bank to pay them to pay them directly. It was just more control and more, you know, positive impressions and brand impressions with the consumer or the payer.
So, this client worked with a third party in partnership with their financial institution to integrate this where they have, you know, ability to invoice, send it to your mobile app, to your text, to email, and then you can respond with one click. You can respond with a card on file. You can respond pay with Apple Pay or Google Pay. You can integrate it could be integrated with tools into Alexa, so it becomes like a little smart app. So, you really are creating this. I want to be where my clients are and meet them where, you know, whether it's a cash flow issue or whether it's, oh, I forgot about that. You're creating a digital communications channel, and there's a lot of providers out there that work with your financial institutions to enable this unique experience.
Not, you know, not everybody's going to have the capacity to build something on their own, but there are a number of providers in this space that are that allow you to, integrate your receivables and then cash flow that out to your financial institution.

Matt Ribbens: That's good. That's a good point. I think it's picking the right solution for your company and the right size for to meet and we do have an out of the box EBPP solution that can be branded. And so, again, that may be the right choice for you, but it's good to explore what are the options you have to improve your collections and just looking at that speed of collections as being an improvement capability vector for you to tackle.
So, I know we're coming up on time, Matt. Did we have a few questions on this trend or others that have come in?

Matt Erickson: Yeah. Thank you, Matt.
The last question that I that I'll have for you, I'm just going through a couple of these that we've received. What related to electronic bill payment presentment and other, you know, opportunities, that that a customer has, when do they decide to build versus buy, and integrate?

Matt Ribbens: It's a good a good question. I'm sure, Jen, you'll have some good insights here too. But I think there's a point where, you know, depending on the nature of your business, if you need to have more customization or if the bank provided solutions aren't quite meeting your need, there's obviously a good opportunity to partner or potentially build. But I think, in this case, a lot of times build is a pretty heavy lift, and that's part of why we've really focused on providing this as a service.
You know, it's you can go to website designers, and you can build a page that looks good. You can go and partner with different, integration points and kind of build that. You have to really commit the technology team to maintaining and supporting that long term. So, if that is a strategic resource for you and a strategic use of your talent and resources then that that makes sense to do that.
But oftentimes, it's, you know, there's multiple ways you want to collect payments and EBPP may be one solution, LockBox or others, and we're happy to help with that. But I think, Jen, this in this case of the case study you shared, they decided to, partner with a different provider, but not even build it themselves, it sounds like.

Jennifer Lucas: Oh, absolutely. And this is a large insurance or, I mean, telecommunications company. But, you know, I really do think it's time, talent, and risk.
Those are kind of the three vectors that I think about. You mentioned two of them. Payments are not, you know, without risk. And there's a lot of compliance associated with particularly in the consumer space about consumer protections and things of that nature. So, I wouldn't advise, like, going out and saying it's easy.
So, I really it really thinks think about it from a, you know, a time, talent, and risk perspective, and always, work with your financial institution to see they may have partnerships where they're just saying, you know, we've worked, or we're integrated like the ERP discussion. We're integrated with these three partners. It might be easier to do business with them just because of the flow of information, or there may be some vetting there.
So, I would just encourage you to think about, a variety of options working with your financial institution. And, you know, I would say that maybe 5% to 10% of corporates that I know have actually built this themselves.

Matt Ribbens: Alright. Let's go to the final slide for today. Just as a reminder, we've got our contact details here. I want to first thank you, Jen, and thank you, Matt.
And it's been a great conversation today on modern B2B payments, and I really appreciate the, the insights and the involvement from, participation from the group as well in our poll and our questions.
If we didn't get to your question today, I know Matt's collected all of them. We will follow-up with you on those questions if you had someone that we weren't able to answer. But you will be receiving a recording as well as the slides over the next couple days, and please feel free to send those out to anybody you think that might benefit.
And I'll close with a thank you for all of your engagement, great questions, and, again, hope everybody has a great day. Thank you.