Wednesday, June 19, 2024

Leveraging technology to transform the payments ecosystem


This is the twenty-seventh in a series of informative monthly articles for North Carolina businesses from PNC in collaboration with BUSINESS NORTH CAROLINA magazine. 

Throughout Doug McKinley’s career in financial services, he has been motivated by the premise of making banking – and treasury management, specifically – more streamlined and efficient for businesses. A steady pace of technology advancements and PNC’s significant investments in digital innovation are helping Charlotte-based McKinley, head of innovation for PNC Treasury Management, deliver on that vision.

“The overarching goal for our treasury management business is to provide clients with faster, more secure payments capabilities that are seamlessly integrated with their core systems and optimized for automation,” says McKinley.

During the past year alone, PNC Treasury Management’s innovation team, which McKinley leads, has been integral to the rollout of new products and services, including two innovative payment solutions: PNC EarnedIt, which helps companies provide employees with access to earned pay prior to payday, and PNC Claim Predictor, which helps healthcare providers identify inaccurate or insufficiently populated insurance claims prior to submission to mitigate losses associated with denied claims.

The introduction of these technology-enabled solutions is timely as CFOs work to identify strategies to succeed in today’s challenging economy, says McKinley. A 2022 survey report commissioned by GTreasury and PNC Bank found that automating treasury functions is one of three areas of pronounced focus for CFOs looking to reduce costs and fuel growth. To that end, organizations are increasingly looking to harness automation and digital tools to help their treasury and finance departments be more strategic.

The report, Pressure Points, Payments & Plans for Automation: The Road Ahead for CFOs and Treasurers, found that treasury technology will not only help CFOs navigate an uncertain market against the backdrop of ever-increasing complexity, but that the added business value of treasury functions may help further maximize key financial opportunities.

“This survey confirmed what we know to be true – that treasury and finance professionals recognize the enormous potential that automation represents in ongoing efforts to reduce business costs,” says McKinley. “It also motivates us to continue to uncover opportunities to innovate for our clients and help them run their businesses better.”

Calibrating pay methods with on-demand economy

In today’s increasingly on-demand economy, on-demand pay is quickly becoming a must-have offering for employees, says McKinley.

“The premise of on-demand pay rethinks the historical concept of fixed pay periods to reflect the increasingly common expectation that employees should have the option to access their pay, as they earn it,” says McKinley. “Advances in technology and learnings from the implementation of real-time payments have made it possible to seamlessly deliver on-demand pay by integrating directly with a company’s existing payroll and time and attendance systems.”

In 2022, PNC teamed up with DailyPay, an on-demand pay platform, to launch PNC EarnedIt, a solution that leverages companies’ existing payroll and time management systems to convert their employees’ time worked into net earnings. This available balance is accessible to employees via a mobile application 24/7, and employees can select the speed at which – either immediate or next business day – they would like to receive a portion of their earned pay.

The financial wellness benefits of on-demand pay are far-ranging and impactful. According to data from DailyPay, 94% of its users use on-demand pay to cover bills and avoid late fees, saving an average of $1,205 annually on overdraft and payday loan fees. 

Employees are not the only ones to benefit from on-demand pay. Employers that offer on-demand pay have reported a 45% average reduction in turnover, with employee engagement increasing by 73% and timeclock compliance improving by 10-15%. Additionally, these companies can typically fill open positions 52% faster.

Alleviating pain points for healthcare organizations

Claim rejections have long contributed to chronic headaches and significant losses – to the tune of $407 billion annually1 – for healthcare organizations.

Doug McKinley

“In conversations with doctors, insurance administrators, health system executives and others, we kept hearing about the challenges they were facing in successfully submitting insurance claims and how this was leading to lost revenue, extended timelines for receiving payment and the diversion of critical resources,” says McKinley. “The PNC team saw an opportunity to develop something innovative that could help alleviate this pain point and help our healthcare clients run their businesses more efficiently.”

The resulting innovation was PNC Claim Predictor, which leverages machine learning technology to review past paid and rejected claims and analyze organizations’ claim attributes and associated patterns. The product’s artificial intelligence (AI) technology can predict which new claims are likely to be rejected and alerts healthcare organizations to claim details that should be corrected before submission. The software “learns” the payment criteria of various insurers and adjusts as payers make changes over time.

“By identifying potential causes for denials prior to submitting a claim to the payer, PNC Claim Predictor can help healthcare organizations reduce the volume of initial denials, lower the total cost to collect claims, accelerate cash flow and increase operational scale,” says McKinley.

While PNC’s technology and innovation team developed the solution using proprietary bank technology, says McKinley, its origins reside squarely in the day-to-day experiences of healthcare providers.

Another example of PNC’s work in the healthcare payments space is its ongoing collaboration with AccessOne, a Charlotte-based leader in patient financing solutions, to deliver consumer financing solutions to healthcare providers and insurers. Working with AccessOne, PNC helps healthcare providers enhance financial performance and improve patient relationships, while also facilitating their ability to provide various financing options for consumers to manage escalating healthcare costs.

While there is no shortage of business challenges to address with clients, McKinley is optimistic about PNC’s ability to help clients architect and implement cohesive cash management systems. “PNC is committed to investing in technology, and we are well-positioned to deliver digital tools, solutions and innovative ideas to help organizations embark on a new chapter of automation and efficiency.”

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