Connor Lawrence:

Great to be here. My name is Connor. I run Customer Success and implementation at TravelBank. So my primary goal is to make sure that my team of CSMs and implementation specialists have a clear path to making our customers successful. I have a background in operations as well, so I really am always looking for new technologies to help streamline the efficiency of our customers’ journey.

Brenna Casserly:

Hi, my name is Brenna. I’m a Product Manager for the expense and card product here at TravelBank where we focus on delivering intuitive and innovative product features that help businesses track and manage their business spend. Prior to joining TravelBank, I held various positions in the banking sector, including a role as a founding member of a FinTech company where I had the opportunity to directly experience a lot of the challenges and opportunities which exist for our current customers today. And I’m really excited to be here.

Shelby:

In preparation for this deep dive, we analyzed TravelBank user data, we interviewed customers, and we surveyed hundreds of finance and HR leaders. The foremost trend we’re seeing is that remote work is not going anywhere. In fact, 74% of US companies are permanently adopting either a fully remote or a hybrid work model. I found this stat really interesting because I know I personally have read a lot of headlines about CEOs from Goldman Sachs or Twitter demanding that workforces come back to the office. But Connor, I’m curious from your perspective in working with so many customers, why are you seeing that remote work is here to stay?

Connor:

That’s a good question. Definitely a hot topic, and I think that number 74% is pretty astounding as well. Just a few short years ago it was you have to fight tooth and nail to get one work from home day and now we’re looking at the majority of workplaces implementing this permanently. I’ll go with three starter reasons for why it’s here to stay. The first one is cost. We work with finance leaders for the most part. Remote or hybrid work models are dramatically reducing the cost of operating their businesses. There’s studies that show, I think it’s about 11 grand per head is actually being saved by working remotely. So that’s reduced overhead on rent, maybe increased productivity, lower absenteeism, lower turnover rates. And once you remove real estate as a line item from your balance sheet, it’s going to be hard to justify returning to the office. I think as a finance leader as well in many cases, if you don’t need to be. So first is cost, certainly.

Second is flexibility. Honestly, this can be a function of cost as well depending on how you’re looking at it. Something like 70% of CFOs said providing flexibility for a work location was the most effective action for retaining talent. Really, that’s a huge cost producer as well. It’s really, really expensive. It can cost double what it actually costs per year to pay an employee to replace them. So this is strongly industry dependent. I do want to call that out. If companies in your industry are offering remote work policies in general, then you have to stay competitive. And if you’re in an industry where maybe your competitors are not offering remote work as an option, it can put you at a huge hiring advantage. So retention and attraction of new talent is a really big piece of this.

Final is productivity. I think prior to the pandemic and really even for of the good portion of 2020 as we adjusted to this new remote environment, we saw a lot of companies that were lamenting the potential loss of productivity due to remote work. What we see in the numbers is a totally different story. So there’s a study in late 2020 that showed that employees were actually working a day and a half extra per month working from home. I’m not saying that’s a good thing, but it does point towards productivity going up. There are people not being able to close their laptops maybe when they’re able to just work wherever they want to at any time. And various other surveys are showing that the large majority of remote workers are less stressed and feel far more productive working from home as well. So I think those three really: cost, flexibility, productivity. If you put them all together creates a really, really strong argument for remote work not going away anytime soon.

Brenna:

I’m actually located in Toronto. And so, just to add to Connor’s points here, you get a wider talent pool when you are not restricted by these geographical boundaries. So it allows companies, even TravelBank, to access more diverse range of skills and expertise. With myself, I’m located in Toronto like I mentioned, but there’s also a growing number of TravelBankers. There’s about 10 of us that are actually in Toronto. It’s not just the benefit of tapping into a wider talent pool, but it also has potential for payroll cost savings. So when you factor in the exchange rate for example, and when you take the average of the last three years between USD and Canadian exchange rate, the Canadian dollar is trading at average of like 30% discount. So there’s definitely a lot of benefits of staying remote.

Shelby:

Another trend I know that we saw related to this is that when folks work remotely, what is considered a “business expense” is very open to interpretation, and the perks can be very uneven manager-to-manager or team-to-team. It kind of begs the question that companies need to think through what amenities are owed to employees to replicate that old office environment that they now have to DIY at home. Does that include morning coffee? Is it gym memberships? Are we going so far as takeout or treadmill desks? But at the same time, if companies are saving $11,000 per head, are there small perks that can boost morale, attract applicants, and still remain vastly ROI positive? I’m curious what from the TravelBank user base we’ve seen in terms of these creative work from home policies?

Brenna:

There’s definitely a lot of creative work from home policies we are seeing. I think it’s a great way to incentivize employees and ensure they have the necessary resources to be productive in their remote environment. Aside from the traditional expenses that remote employees are typically need covered such as internet or home office equipment or phone, we’ve seen our customers start to adopt more inventive policies to accommodate this shift towards remote work, and I’m happy to share a few examples.

The biggest one is health and wellness allowances. Companies and our customers have begun to allocate a monthly or annual allowance for employees to use on home gym memberships or fitness apps or even wellness classes in general. Even team events. At TravelBank, the Toronto team gets together monthly so we have a monthly stipend that will cover any team outings or team dinners. We’ve also been seeing a lot of co-working space stipends. Because not every employee has the ideal workspace at home, so a lot of companies are offering that. Or even home office improvements.

We’ve definitely seen a few companies actually offer digital nomad support. So for employees who work remotely while traveling if they choose to do so, and I know a few TravelBank employees who actually do this. So companies offer that support in the form of WIFI devices to even international SIM cards.

And I just want to take a moment and look at some even emerging trends. Now this is a bit more forward thinking and definitely not applicable for every organization, but we have started to see some companies implement virtual reality headset allowances. These companies actually love it as it makes remote interactions feel a lot more engaging and definitely realistic.

Shelby:

That’s really funny. I’m an introvert so I’m happy being alone in the office. I know that’s not everyone.

Connor:

I think that’s a funny one. I love this conversation because you look prior to 2020, the biggest trend and probably one of the more talked about things especially in reference to the technology industry is the opposite of work for the moment. I called it work is home historically because you would have Google, Facebook, et cetera, all these big companies that were adding nap pods or kitchens, in-office laundry to make you stay longer and longer. Why go home at all if you have better facilities here in the office? Now everyone’s being told to stay at home. So we’ve seen this whole industry flipped on its head to a certain extent.

I think what’s really important though is why were we creating those amenities in the workplace in the first place? That was really to make people feel comfortable. Now we have to figure out ways to do the same thing if we’re asking people to stay at home. You can’t just tell your employee to work from home and leave them to their own devices. So all the things that Brenna talked about are super important. And not all home offices are created equal. Many people, most people don’t even have an office space within their home. So I think that’s really the key thing here is it’s much more bespoke. You have to give and empower employees, I think, to design their own space and if you’re going to ask them to work from home permanently.

Shelby:

I work for a small content agency led by a team of moms, and we expense house cleaning. It’s a non-traditional use of our WFH expense budget, but it has such an impact on us to not be staring at a dirty house all day thinking about doing the dishes. It makes a big difference. I like that idea that it is bespoke not just to the company culture, but to the person and their home environment.

Brenna:

I have to steal that idea or at least bring it to TravelBank. I wouldn’t mind some home cleaning.

Connor:

Hope my finance team is listening in.

Shelby:

I want to talk about our third trend we saw, which is that expense report volumes as a whole are accelerating at a wild clip. They’ve actually doubled since 2019. What’s causing so many high volume and low cost expense reports?

Brenna:

It’s definitely interesting and certainly something we too observed when looking at the volume at TravelBank, and there are a few key factors that contribute to this trend. But first during the actual pandemic, a large portion of our expense volume was in fact mileage expenses. We saw a huge spike in people choosing to drive versus get on an airplane or even rent a car, especially in frontline industries that never really slowed down. And as we look at the last two years, so post pandemic, the largest contributor was the shift to remote work. And with that there’s been a corresponding increase in the types of expenses employees need to be reimbursed for like home office equipment, utilities, internet services, and also the rise of subscription-based services. A lot of our customers have actually empowered their employees to really select the tools and resources that help them feel more productive while working remote.

Then we’ve seen other contributing factors are those creative work from home policies we just chatted about earlier, especially around employee well-being and to help with that work-life balance. But I think overall, if companies have a very manual expense process, the volume can be really a large burden, especially for finance teams. But that’s why I think it’s key to invest in an expense management solution that really automates and streamlines that whole expense process.

Shelby:

On the travel side, we saw that there’s more people literally on the road than ever. What’s going on with travel and what’s changed?

Connor:

How long do we have? It’s a big question, but I think it’s a good one. Look, travel was zero in 2020. It’s sad, which has never happened as far as I understand it before. Maybe post 9/11 is the closest in terms of US travel reducing. So it took, I would say, really until this year for travel to come back in full force, which meant that travel and finance teams had a lot of time to think about how they wanted to design their policies moving forward, how they wanted their people to get back in the road. But in many cases, and among new customers who we see come into TravelBank, they still don’t have the answer and they’re looking for guidance or support from what other companies are doing to move forward.

So a very common theme that we see from new customers is that their policies are really still what they were in 2019, the beginning of 2020, and they need guidance there. And there’s still confusion from their employees on what they can and can’t do because policy still is that 20 page static pdf that they’ve never read and they’re not going to. But also they know that something’s changed. The pandemic travel is just different. So I think one of the biggest root changes in travel is the guidance from travel and finance teams has really had to be updated and be more specific to your employee groups and who’s traveling.

I would also say the road warrior environment that we used to be in, travel was very consistent across most of our customers pre-pandemic. It was customer facing teams or operations teams who were in the road, they were working with partners and they were flying out to see individual clients and they go on location with different people. That’s kind of what we think about still when we think business travel. But when we’re speaking about companies who work remotely, a lot of that travel is it’s either gone away or it’s at least diminished pretty substantially. We found that you can have an hour zoom call with an enterprise client and still close the deal or still keep the customer happy. So the finance team is a little more focused on controlling costs there.

I can talk about that more in a minute, but what we’re seeing instead is how do you get your team together? While we all love remote work and people feel more productive and happy, we also really want to get together and form those team bonds that make a team operate I think at a higher level and help with retention. We just had our revenue team kickoff a couple of weeks ago and I can’t speak enough how much energy and inspiration came out of that program. And that was a group travel event. So that’s really one of the biggest changes is we have more requests than ever coming in for team offsite events, et cetera, which is a very different traveler group. You said there’s more travelers than ever. It’s true. As a percentage of a employee population, we’re seeing more and more people on the road than ever move forward. Even if it’s a little less frequent, it’s a larger percentage of the total. So, that’s huge.

I think a weird one with this too, which and I’m sorry, I apologize, I hate this word, but pleasure travel is something that has really come to the fore too. If you’re allowed to work anywhere when your company flies you to wherever, let’s say New York for a company offsite, maybe you want to stick around for a week or two and work remotely from that office location and get to know your colleagues there or whatever it may be. So we’re seeing this blend of personal travel and work travel come together alongside the event travel.

The final piece here as well, which kind of underlies all of this, is the involvement of the office of the CFO. I would say that’s really a big trend we’ve seen is through the pandemic, the finance team took more control over travel. We used to speak to a lot of people teams, and I think we still do, but the finance team is much, much more often involved in these conversations with our customers on travel policy, on travel budget, et cetera. So as things move closer to the CFO, they tend to get a little tighter in terms of what travel makes sense and which travel does not. So there is again, that one hour meeting with a customer might not be authorized anymore, where a team event might actually be easier to get sign off on because it’s easier to tie that to something you can’t do from a remote location.

Shelby:

It goes without saying that the avalanche of remote expense reports, coupled with the challenge of things like large team or company-wide group bookings, it’s very resource heavy. I’m curious what ways you’ve seen customers simplify and automate this process because.

Connor:

That’s a good question. That’s kind of at the root of what we do so that’s close to home for us. When you’re looking at automation, technology is the first word that should always come to mind. What are you using technologically to automate and simplify your work environment? Why tech companies exist really at its core? I think there’s a few things. So I’ll point to maybe three or four that we see our customers do and that we recommend our customers do.

So first you can create rules directly in your traveling expense tools to help guide your employees on what is a violation or what is not. Get rid of your 20 page PDF policy. Nobody’s ever read it. I’m sorry, I know people spend a lot of time in those things, but maybe write it and put it on a shelf and then build that into your tools. That’s what tech is for. And make sure that there’s triggers for approval or a flag for a policy violation, something like that so that you don’t have to tell people that what they did was wrong through an email. So you’re going to save time there. You’re going to help guide your employees contextually there as well.

The second one, we see this a lot, but you can reduce the number of steps you have in your approval process too. What really, really often will have customers come in who have five, six levels of approval for a single expense report. That’s really cumbersome. It creates a lot of opportunity for risk for your accounting team as well. What we try and guide customers on is looking at that policy, which typically was created prior to good technology being available. So it made sense for them to do that to catch fraud historically. But now with fraud detection tools and better policy creation and everything built into the expense management tool, you don’t need to do that. You can even just control that at the point of purchase with merchant category codes or controls in your credit cards. So I’d say that’s really a very common one we see is simplify your approval process, trust software.

The next two, I mean I would say, Brenna can probably speak more to this one, but virtual cards are huge. You can get cards on hands of employees, and as I mentioned, you can block vendors with those. You can make sure that they’re only spending up to a certain amount within a certain day range. So that’s a really good way as well. Corporate card programs are much easier to administer and roll out than they were 10 years ago, even 5 years ago, honestly. So I think those three are, that’s a really good place to start. That’s typically where we make sure we baseline our customers at when they come in and then there’s incremental improvements we can work with them on as well.

Brenna:

Just to chime in on that virtual card use case Connor mentioned, I mean from TravelBank perspective, I get an instant card sent to my mobile wallet within seconds at a limit within policy for when we do team dinners. That card then is automatically added to my TravelBank account. The transaction data syncs over and TravelBank then creates and basically auto completes the expense details for me. So, it’s very easy.

Shelby:

I’m charmed by the whole notion of that. What can companies do to also help employees who are less savvy at expensing, to file them correctly, do it in policy, do it on time?

Brenna:

I think an expense management platform, it plays a crucial role in helping the employees file the expenses accurately and ensure that it is within company policy. Building on that is making sure you have adoption and engagement across your organization. At TravelBank we help our customers’ employees engage in our platform. The way we do that is that we always design for the most intuitive, easy, and simple expense experience. So if you are on the market for an expense platform, you definitely assess how intuitive the expense process is.

But besides that, we have seen some ways an expense management tool helps these less savvy employees, starting from the finance perspective. Having customized policies and enforcement custom fields, approval routing, error flags, and real-time analytics and insights to help identify trends, outliers, really enables you and the finance team to refine the policies and optimize the spending.

In addition, we’ve also found having a mobile app is key to submit, track, and approve expenses in real time. From the employee side you can really snap a photo of the receipt and TravelBank will automatically extract that relevant data and begin completing the expense for the employee. With that, we’ve seen drop in missing receipts, inaccurate entries, and even delayed submissions, which I know is one of the biggest pain points for finance teams, specifically even TravelBank finance teams. So I think those are pretty much the big trends and ways we’re seeing how you can engage and then also make sure your employees are submitting correctly.

Connor:

I’ll just add to that: context is everything. If you don’t contextually tell your employees what to do in the moment that they’re doing it for anybody, this is just a law of education I think universally, then it’s going to be really difficult for them to know what to do and therefore you’re going to have breakdowns in your process along the way. So that’s something from a design perspective that we try and think about is, as you go through the travel booking process or the expense submission process, are we helping guide on what’s okay, what’s not okay? Are we letting the administrator build those barriers in, those gates in, and then are we giving a clear guidepost to the end user to walk through the correct gate at that right time? So again, context really, really critical here to reduce friction with the end user there.

Shelby:

The last trend I wanted to talk about was around virtual card adoption to help both companies and the employee cope with this volume of small expenses. During the pandemic virtual card adoption finally outpaced purchasing cards. I was intrigued researching this. I didn’t realize I already had a virtual card. It’s just a credit card on my phone effectively. It has the normal 16 digits and an expiration date and security code. How do we though see how virtual cards help finance an AP specifically?

Brenna:

I could take the first stab. I think that’s a really great question. We can really spend probably a whole session just talking about the different use cases for virtual cards. But at a high level, they offer several advantages for companies including improved control and compliance. Connor touched on this earlier. Finance teams can issue virtual cards with specific spending limits, custom expiration date and merchant category controls, which really allows finance teams to enforce purchasing policies a lot more effectively. Once the card is issued, it’s actually no longer active. So this level of control really helps overspending and ensures employees comply with company policies when making purchases.

There’s also the ability to earn rewards at scale. So your business can generate additional revenue from cashback rebates when using corporate cards. So putting more of that out-of-pocket expenses on these virtual cards. On top of that, like points accrued through your corporate card program, you can pull them and then use them to offset future travel and expense, for example.

Then another benefit we’ve seen is streamlined reconciliation. So transactions are automatically synced into your expense system. You get full transparency and access into all transaction data. You can also link a virtual card to specific project or department or even cost centers. So really all of this combined makes it a lot more simpler to track and then reconcile these expenses.

Finally, I know we touched on this earlier, is the growing acceptance of virtual payments. I read an article recently where PWC anticipates that by 2025, 80% of global payments will be digital. A contributing factor besides the ease of use is that it’s actually more secure than a physical card because your mobile wallet doesn’t send your card number to the actual merchant. So if the merchant ever has a data breach, your card details wouldn’t be exposed. I think that is another great benefit to adopt virtual cards within your organization.

Connor:

I think, just one thing I’ll add. We work in travel expense and payments, and this is an industry that kind of straddles business and consumer very closely. So something that we always have to consider and kind of be one step ahead on is, okay, where is consumer tech for payments and where is consumer tech for travel? Therefore, what is the consumer starting to expect for enterprise software? Enterprise software always lags behind on the user experience. It shouldn’t have to, but I think historically it has. As Brenna mentioned, and Shelby, as you acknowledge yourself, virtual cards and virtual payments have been part of our lives for years now and we just haven’t really realized it. They just kind of snuck in. All of a sudden your phone is a credit card. I think that’s something that we as the companies that are help helping organizations bring virtual cards into their environment can do a better job educating on.

Because Brenna is the expert on this stuff and she mentioned a lot of the benefits, but we have to look at it from the perspective of the employee as well. They’re used to digital forms of payment. That’s such a natural part of their day-to-day. I don’t know why we shouldn’t, or the company shouldn’t offer something similar to them as an option in their work environment as well. Just in the same way we’re helping them work from home. Let’s help them with modern forms of payment as well.

Shelby:

These trends and many more are forthcoming in a research guide we’ve written about travel and expenses after the pandemic.

I want to thank Connor and Brenna, thank you to all of our attendees. If you’d like to learn more about TravelBank, you can of course do that at travelbank.com, or you could reach out to your customer success manager.

Brenna:

Thank you.

Connor:

Thanks, Shelby. Thanks, Brenna.