The process: Building products that offer true impact

Why solve for virtual account management?

In 2021, we conducted a thorough analysis of our Embedded Banking market position and identified the gaps in our offerings. We found that one of the most sought-after features by our clients in the tech sector was virtual account management. They needed it to help them manage multiple bank accounts with ease, speed, and efficiency.

The more we analyzed the potential for a VAM solution, the more we realized the tremendous impacts it could have not only for the tech sector but for real estate, energy, property management, and nearly all other industries.

It also helps solve a common pain point for many commercial clients: reconciliation.

Nearly half (44%) of U.S. businesses say payment reconciliation is their largest concern, according to a PYMNTS report. Some of our largest clients have as many as 20 employees spending 40 hours a week making sure every payment that goes in and out of the company is reconciled properly.

We decided to provide a self-service, fully digital way to streamline those processes.

How KeyVAM came together

After deciding to pursue a virtual account management solution, we first analyzed our in-house capabilities and quickly realized this project could take years to complete. We knew our clients couldn’t wait that long, so we decided to find a fintech partner that could help us iterate a solution in a fraction of that time.

We evaluated a number of vendors by assessing their infrastructure, their existing clients, their use cases, their APIs, and their ability to build custom features for us. Ultimately, in 2023, we signed a deal to develop the KeyVAM solution with Qolo, a fast-growing payments processor founded by an impressive team of veterans in the payments space.

Qolo understood our vision of delivering more tech-focused solutions. Their technology stack was first class, and we recognized their APIs and guidance would be truly differentiated in the space.

Then, in a matter of months, Qolo’s tech and expertise helped build a KeyVAM solution that’s well beyond an introductory version.
 

What does KeyVAM mean for clients?

Our commercial clients who leverage KeyVAM will enjoy a simpler account structure that allows them to spend less time and effort reconciling payments and opening new accounts. This means enhanced reporting, faster account opening, and improved cash visibility. All of this leads to more time available to scale their businesses.

Let’s walk through a few scenarios to show how KeyVAM can empower growth and efficiency for different businesses and the people who work there:

Client scenario: Multi-location franchise business

Let’s imagine a parent company that owns 30 different franchise locations of a retail business and has a separate demand deposit account (DDA) for each location to collect payments from customers and make payments for location-specific ordering. The parent office manages all the payments in and out of each franchise location at the corporate level, such as buying new equipment or paying fees.

Using KeyVAM, this client can now streamline its banking process by having one master DDA at KeyBank and a subaccount for each of the 30 different locations that have unique routing and account numbers to make or receive payments.

The client can also download one master statement for the parent account or view the details of each subaccount digitally through the KeyVAM user interface.

This saves the client time and hassle by potentially eliminating the need for 30 separate statements, logins, and reconciliation processes.

Client scenario: Property management group

Imagine you own an apartment complex with 100 units and 100 residents. You want to keep security deposits for each resident in separate bank accounts. Without KeyVAM, this is a lot of work. You have to fill out and send dozens of forms to the bank and wait weeks to have these accounts operational, or you might have one account for all of it, and then track the balances in some other software or spreadsheet you’re toggling back and forth between.

KeyVAM makes this easier. You have one main account and 100 smaller accounts for each resident. For example, if Bennie Pennington wants to move in tomorrow, all you do is gather his information, log into KeyVAM, make an account for him, give him the routing and account number, and he sends you the deposit directly to his individual subaccount. You can do this in minutes with one digital tool.

For the front-office personnel, the benefits are very straightforward — streamlined account creation and management. But the impact of the solution for back-office personnel who manage dozens (or even hundreds) of DDAs is even more transformative.

Persona scenario: Accounts receivable (AR) manager

Imagine you’re an AR manager for a title company that helps people buy and sell houses. You have to deal with a lot of individual payments coming in and going out. When someone wants to buy a house, they send you earnest money to hold until the deal is done — which could take 90 days or more.

Then, when the deal goes through, you have to send that money to the seller, the agents, and others. This can take a long time and be confusing if you’re juggling multiple wires per day, double-checking bank accounts, validating information that’s months old, and logging in and out of multiple accounts.

But with KeyVAM, if Bennie Pennington wants to buy a house, you make an account for him and give him the account number in minutes. He sends you the earnest money directly to that account. You can see the money right away and know it is for his deal without checking any papers or transferring any money. When the deal is done, you send money from that account to the seller in a few clicks.

Persona scenario: Onboarding manager

We often deal with software companies in the tech vertical that offer solutions for consumers or small businesses that need the product. Many of them want to embed payments within the software, which means they need to separate funds coming in and going out for each client. To do that, they need to set up a new account for each one — which can take six to eight weeks per client in a traditional banking scenario.

If I’m in operations or onboarding setting up accounts for upward of 50 clients per month, I have to send dozens of forms to the bank, wait weeks for updates, and somehow keep track of everything. Not to mention, I have to do the same thing when a customer closes their account.

But with KeyVAM, this can be streamlined and even automated. When a new client comes onboard, I can go to my KeyVAM API and tell it to stand up a new virtual account using the information on file for the customer. So, in less than a minute, I have the account, it is already enabled for payments in and out, and my new client is ready to roll.

Persona scenario: CFO

Imagine you are a CFO, and you have 60 bank accounts for your business. It can take several steps to see roll-up reporting for all those accounts in a traditional DDA setup.

But with KeyVAM, you can have one parent DDA account and 60 subaccounts and get statements in a CSV file for all 60 of those subaccounts in just a few minutes. Or better yet, view the roll-up and detail within our intuitive user interface, all available in a few clicks within KeyNavigator.

For our largest clients, it’s valuable to be able to easily see roll-up data and drill down into individual accounts with as much detail as you need with as little effort as possible. And with KeyVAM, we’re empowering organizations to get the information they need in a matter of moments, all within a single interface.
 

Furthering the mission

KeyBank’s mission is to help our clients grow and run their businesses better. We heard from clients about their needs for virtual account management and to connect to their software more directly through APIs. We leveraged their pain points to develop a solution that allows them to take the guesswork out of reconciling and managing their accounts.

We want to help power growth for our clients and make it exciting, not daunting. If they’re a small business and want to grow to the size of an enterprise company, we have the security, stability, and modern solutions built to adapt and scale with them.

We want to be a client’s bank for life, and KeyVAM helps us do that.