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Agent Banking Through Kontrol An introduction to Kontrol’s Answer for banks that desire to offer Accounts Payable Solutions to their clients . Agent Banking Overview. What is agent banking?
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Agent Banking Through KontrolAn introduction to Kontrol’s Answer for banks that desire to offer Accounts Payable Solutions to their clients
What is agent banking?
In the context of the card business, Agent Banks typically license the credit card programs and technology of other banks (Sponsor Banks).
Why agent banking?
This structure enables the Agent Bank to offer the technology and product of the Sponsor Bank to its customers without a lengthy implementation process and without large up-front fees.
Who are typical Agent Banks?
Typical Agent Banks are regional banks with strong, local treasury relationships and a need for a commercial card solution, but larger national banks and non-traditional banks are also eligible for the program.
A typical Kontrol agent banking candidate has fielded questions from its larger clients around card-based AP solutions or may have seen competition encroach on its treasury relationships because of a lack of a viable AP product.
How does agent banking work?
Agent Banks contract with Kontrol and one of Kontrol’s Sponsor Bank partners to license Kontrol’s best-in-class card-based AP solution.
Volume from the Agent Bank flows through Sponsor Bank’s BIN via the Sponsor Bank’s contract with the core processor.
Year 1 will yield $350K in incremental revenue to Agent Bank assuming $100M in AP spend volume. Based on growth of overall portfolio, Year 3 revenue could exceed $1M.
(account ownership, funding)
(program management & servicing)
Kontrol Partner Bank (Sponsor Bank)
(card management technology & managed services)
Kontrol provides a turnkey AP Automation product that:
Outperforms the market
Offers easy integration
Leverages best-in-class technology
The market share of issuers using the same technology solution as Kontrol grew from 5% in 2006 to 12% in 2012.
Market Share = 12%
3 Year CAGR = 35%
Combined Fleet, Corporate, and
Market Share = 79%
3 Year CAGR = 16%
Market Share = 9%
3 Year CAGR = 21%
All other 2012 Issuers
Source: Nilson 2007-2013; SilverStream Advisors
ERP Integration – No change to existing accounts payable processes. A file can be produced using the alternative payment functionality of client’s existing ERP systems, so they can process card payments in the same way that they are processing check or ACH files today.
Push Payment – Suppliers can receive the straight through processing of an electronic Visa or MC payment without any manual intervention to receive the payment or the data. This means auto reconciliation for your clients and a large spend program, which yields great revenue.
Pull Payment – 95% of card-based AP spend runs through this method. The supplier receives notification of payment from the client and processes their payment through an existing payment terminal.
SUGA (Single Use Ghost Account) – This special card type allows for suppliers to accept payments, but they are not set-up with a recurring 16 digit number. Many vendors are reluctant to accept payment technology as they have system restraints that will not allow them to store a card number on file – resulting in lower vendor acceptance. SUGA allows a supplier to receive notification of payment from a client and then prompts them to log into a vendor portal to receive a single use card number to satisfy payment. Once settled, the card number is purged from the system, never to be used again.
Single File Solution – A single file can be produced for a client’s entire payment file. Payments can then be made via Card, ACH, and check.
Key Features of the Product
Sales and Marketing Support
Kontrol’s agent banking customers own the receivables associated with their portfolio.
Unlike other agent banking programs, the Agent Bank will have full portability if it decides to change strategies, providers, or move to a direct relationship with Kontrol’s technology provider.
This ensures that Kontrol’s agent banking customers maintain the treasury relationship with their clients despite the use of the Sponsor Bank’s technology.
The Agent Bank can choose to fully outsource the sales function to the professional sales force working with Kontrol and its partners.
Kontrol and its partners use an executive level sales force with decades of combined experience selling Kontrol’s technology solutions.
Kontrolwill coordinate trainings for the Agent Bank’s sales force in order to ensure that they are fully equipped to make the program a success.
Kontrol will provide collateral and other marketing materials for customization and use in the Agent Bank’s sales process.
Contact Kontrol: If you are interested in Kontrol’s agent banking program, please contact us (next page).
Demo: Kontrol is happy to schedule a demo with your team at your earliest convenience.
Diligence and Contract Discussions: Kontrol welcomes further diligence and follow-up conversations as needed to ensure that Kontrol’s agent banking program is the right fit for your financial institution.
Roll-Out: Kontrol and its partners anticipate roll-out of this offering within 60 to 90 days of the final contract signing and related agreement on terms.
Scott Songer: CEO
Chad Clay: SVP, Client Management
Sean Songer: COO
Thomas Parrish: SVP, Business Development