How Digital Banking is Affecting the Payroll Industry

Digital banking in Payroll - Snow Technology

Digital banking saw a marked uptake with the Covid-19 pandemic, with many Irish consumers who had never used online banking going digital for the first time. Apps such as Revolut and N26 have revolutionised personal banking, with offerings that are cheaper and far easier to use. This revolution, and the benefits that come with it, have created new expectations for the payroll sector. All players across the field now expect faster, easier payroll processes, and while banks have been slow to adapt, the payroll software industry has been rising to meet these expectations. Snow is the payroll provider dedicated to helping companies and businesses improve their payroll function with digital banking; this is why we have created this guide to give you an overview of:

Digital banking.

How digital banking is changing the payroll sector.

The benefits of using digital banking in payroll.

Let’s dive right in.

What does digital banking mean?

Consumers understand digital banking as a shift from traditional banking processes involving paperwork, checks, pay-in slips and so on to digital platforms. With digital banking solutions, users can send and receive payment and carry on with other banking activities via mobile, tablet or laptop. SEPA is one of the digital solutions bringing speed, efficiency and convenience to the payroll sector.

What does running payroll involve?

For small businesses, running the payroll is as simple as adding up employee hours, calculating pay and sending out the payments to employees. However, for large companies working with a huge workforce, across various countries, payroll processing is a complex process that is often outsourced to payroll providers. Both companies and payroll processors use payroll software to simplify the payroll processes. Digital banking has been disrupting outdated payroll practices with innovative payroll software.

How does payroll software integrate with digital banking?

With payroll software companies partnering with fintech companies, the latest example being BrightPay’s partnership with Modulr, payroll providers can now take advantage of direct payment services.

Payroll software integrates with digital banking platforms using API’s (Application Programming Interfaces) that allow users to initiate payments to employees seamlessly from within the software. Payments are then approved through two-factor authentication on mobile before being forwarded to employees.

How is digital banking affecting the payroll sector?

Disrupting outdated payroll processes – Even though the payroll sector is still clinging to the traditional Bac files and paystubs, many modern businesses are finding it hard to resist the benefits of a digitised payroll system. Payroll software offers an automated workflow and the ability to make real-time payments which in turn offers many more benefits such as;

Greater security and compliance – The infrastructure of digital banking solutions is designed to ensure the highest level of security for system data. Automatic compliance to banking and tax laws is integrated into the software with changes reflected automatically.

Faster payments – With payroll software users having access to SEPA credit transfers, payroll processors can initiate payment with a few clicks of a button. This is unlike the traditional method that required payroll processors to submit bank payment files on a biweekly or monthly basis to complete the payroll.

With digital banking in payroll, managers no longer need to manually submit payment files to their bank three days in advance of the payday. They can send payments on the due date before 2.00 pm and any payments sent after that will automatically be fulfilled on the next working day. Additionally, any payments sent during non-working days are automatically completed on the next working day.

Time savings with a more efficient payroll process – Digital banking in payroll is a big step forward for businesses that manage their payroll and want to save a huge amount of time. Using payroll software eliminates the time consuming, repetitive and frustrating steps of inputting data into Bac files for every pay cycle.

Digital banking in payroll offers greater flexibility – In addition to making the payroll process more efficient, Digital banking in payroll has also allowed multinationals and businesses with a remote workforce to operate seamlessly. Payroll processors can now send payments across the EU member states and the UK through either EUR or GBP accounts thanks to digital banks offering access to the Single Euro Payment Area (SEPA).

Avoiding costly payroll errors – Errors in a company’s payroll can mean paying costly penalties among other legal measures. By using innovative digital banking solutions, both payroll bureaus and companies can avoid the inevitable errors of manually entering data and uploading bank files. Some payroll software solutions also have an inbuilt layer of protection against human errors, by offering clients a chance to approve payments on their dashboard before payments are sent out.

How is digital banking in payroll helping businesses attract and retain employees?

The pandemic caused a massive shift in the priorities of many employees. Reliable and timely payments are at the top of the list, especially within industries that deal with daily or weekly payments. To stay competitive, and reduce turnover, companies can no longer afford to work with slow, inefficient payroll systems. With digital banking solutions, payments can be sent 24/7 conveniently from a dashboard without having to worry about meeting bank deadlines. The restaurant industry especially has been moving away from traditional working contracts to on-demand gig contracts, as employees look for faster payments. Restaurants using digital banking systems to run their payroll can avoid losing their top talent by offering direct deposits and a shorter pay cycle.

More benefits of using digital banking in payroll

  • No more floating checks – businesses have better control of their cash flow
  • No more lost pay-stubs, and the subsequent need to re-run the payroll.
  • No more paperwork. Fiscal accountability moves from managers to employees

The future of digital banking in the payroll sector

Irish consumers want to feel more in control of their money and as more people experience the benefits of digital banks over traditional banks, their attitude towards outdated payroll systems will inevitably change. Digital banking has been revolutionizing the payroll sector through apps that are easier, faster and more convenient to use. Some of the benefits of shifting to a digital payroll system are:

  • An automated workflow which saves time,
  • The ability to make real-time payments,
  • Avoidance of costly payroll errors,
  • Shorter paycycles,
  • And better compliance to tax laws.

If your business is ready to make the jump to a digitised payroll system, or simply want to move to better payroll software, Snow technology is here for you. More than 1500 organizations trust Snow with their payroll. Get in touch with us, We would love to hear from you!

Book a free demo

Find out why more than 2,000 businesses trust Snow Technology’s products and services. Fill in the form or call us on +353 (0)1 213 0737

I am interested in: