Huntington Bank plans to grow its treasury management business in a dramatic way, says Doug Hartsema, senior vice president and director, treasury management, Huntington Bank, who sat down with us this morning at the NACHA Payments conference in Seattle. Hartsema is a payments veteran and player. He started his career at Wachovia, was there for 18 years in various positions in operations, trust, and treasury services, then moved to treasury workstation vendor Selkirk (in which Wachovia had bought a stake), then jumped to Bank One to run its lockbox area."I loved the lockbox business then, and I still do," he says. Asked why, Hartsema says because it's "critically important to our customers. It's more important to customers than to us. Banks say it's labor intensive, it's not high margin, but customers say they don't know how to do this any more. They used to use lockbox for cash acceleration and float, now they outsource this part of their acounts receivable operation to us."
Hartsema's biggest project at the moment is building a new treasury management team. He's been hiring executives from rival banks (some of whom he's worked with before), with eight down and two positions left to fill. One recent hire from a large bank will oversee the building and integration of new technology.
Asked if the bank would offer the kinds of workflow and business process management tools (e.g. expense management software) that Wells Fargo has been offering its commercial customers, Hartsema replies, "I think they're onto something. the mission for banks has always been to move payments around, but customers have work to do before and after, such as data entry and accounts receivable, and that's consistent with what we've done with lockbox."
Another big project for Hartsema is to develop a fast method of onboarding new commercial customers. "The industry does a miserable job at this, our products tend to be hard to buy and implement," he says. "We want to make them easy to buy and implement. Traditional lockbox implementation takes 6-8 weeks, we'd like to make it eight hours." He'd like to create a web interface for customers and introduce self-service for adding on new products.
Huntington doesn't plan to build this and other new platforms completely in-house. "We'll probably buy a lot more than we'll build," Hartsema says. "We're that way today. We're not large enough to build everything ourselves. Even if we were, I'm not sure we'd support that. We need to be skilled at integrating products that are out there."
The bank would like to design and build services specifically for middle market customers. "The industry has tended to build for the largest customers, then hope those products work downmarket," he notes. "Our sweet spot is middle market companies." He plans to meet with mid-size clients one on one and through focus groups to understand their needs better and perhaps design niche products for them. He also sees an opportunity in helping customers improve their adoption rate with products such as direct deposit.
On the card front, Hartsema concedes that Huntington is more of a follower than a leader. However, it has stumbled on some single use cards, such as a prepaid card it developed for a Michigan county that uses it to pay jury fees. "A card is a terrific way to do that," he says. "This gets us out of the escheatment business."
Huntington is looking at offering mobile payments for business and consumer apps. "We'll go there at some point, but I don't know if we've figured that out yet," he says. He muses that the payoff of mobile payments is unclear, and something he'll be looking into at the rest of the conference.