• Sabrina Castiglione, COO at Pento


• 30.01.2024 10:58 am

As financial services are embedded in more and more digital environments, the ways in which HR teams handle payroll management continue to evolve. Pento has differentiated itself in the UK payroll software market by offering automated processes, flexible scheduling, and integrations with several types of third-party platforms. 

In this interview, Sabrina Castiglione, Pento’s COO, spoke about the state of fintech when it comes to HR use cases, and the trends she’s paying attention to most in the context of UK payroll processing.

From your perspective, how has the embedded finance trend changed HR most in recent years?

I think billing has undergone a huge shift that has fundamentally changed the way companies charge and price their products, and it impacts working capital as more automated near-real-time payments are happening, rather than the older invoice-and-wire process. 

For modern companies, it's a net-neutral on working capital, with efficiency gains. At less modern companies, the increased speed of supplier payments, with lagging receivables can fundamentally change how you have to manage your company's cash. 

That's part of a general efficiency shift that has implications on HR by way of its influence on the workforce, with a digital literacy, retraining, and productivity focus. The pace of change means that job content is much less static than it used to be, and a lot more people are switching disciplines.

What platform integrations do people use with Pento and why?

Today, with all-in-one software solutions on the rise, many companies are forced into using suboptimal software to deliver on different types of tasks, ultimately compromising. At Pento, we don't believe this is something that you can do when you are managing something as important as your employee's wages.

To this end, we've strived to offer a versatile platform that seamlessly integrates with various softwares to cater to diverse business needs. While the platform does not require that anyone use integrations, our customers often find value in connecting Pento with other tools to enhance their overall workflows.

All-time favourites of our customers are our out of the box HRIS integrations and our accounting integrations. Both streamline the process by automating data collections and reducing the tedious and often error prone processes that a back and forth of a multitude of spreadsheets always result in.

HR, finance, operations and payroll professionals alike value the freedom to choose and integrate the tools that best suit their specific requirements. This not only improves overall efficiency across departments, as customers are not stuck with a software they may have outgrown, but also future-proofs the payroll process by accommodating changes in software preferences. 

From a fintech perspective, how are automated salary payments different in the UK from other markets?

The payment rails in the UK are fairly fragmented. You have BACS, CHAPS, Faster Payments. On top of that, you now have both e-money accounts, which offer much better APIs to integrate with, and you have Open Banking, which is aiming to do the same for normal bank accounts. 

All of this offers a lot of flexibility in payments if you are willing to do the work to implement them. For example, e-money accounts and Faster Payments allow you to send automated payments, usually within seconds, giving payroll admins the flexibility to run payroll up until and including payday. 

Traditional BACS payments can still be automated, but they require five working days to complete. And Open Banking offers a middle ground, where you have more control over the payments, but you will have to perform an authentication flow with your bank for every time you want to perform them.

Why might UK businesses object to automating payroll, and in what situations are they better off sticking to manual processes?

A manual process is sometimes preferred if it's a smaller, less complex payroll. For example, if you have a small, static payroll where everyone is salaried. they don't have any variable data each month, and there’s no or super super low staff turnover, then benefits like a HRIS integration and automated calculations are not really relevant. 

Also, if a company offers only statutory sick/maternity/paternity pay, with no enhanced policies, and one standard pension scheme, then again there probably isn't much to be gained in the way of automation.

In these instances it may be preferred to keep the payroll on a more manual system, as the cost may be lower and payroll is more likely to be an additional task that someone does each month as part of a different job, because there are no changes to implement. Therefore, there is no cost for a more advanced system, and also no additional cost of employing someone to actually run the payroll.

Cost generally is why someone might object to automating payroll – because an automated system is more likely to have a higher cost than an older, more manual system. If you have someone whose job is only processing payroll, why would you want to automate that process? It's important to remember that “processing” a payroll, especially a complex one, is more than just entering data from one system to another, and by automating the data entry and calculation parts of the process, the person looking after your payroll can add much more value to your business. 

An automated system can then give the person running the payroll more time to be proactive – for example, to reach out to employees if their pay varies to explain why, helping engagement across the business in terms of stats. They might report on how many people utilise a payrolled benefit-in-kind, what would be the benefit/cost of introducing a salary sacrifice pension scheme, and so on. 

At Pento, what measures do you take to ensure data privacy, given how sensitive the information you handle can be, and given how many cross-platform data pushes are required?

We encrypt everything both on the wire and at rest. We are ISO 27001 certified and keep strict data handling policies to make sure our customers’ data is safely handled.

What fintech industry trend do you see as being most impactful to the payroll management niche in 2024?

I think one of the most impactful trends we’re starting to see is a greater number of neo and challenger banks out there now helping create much faster, more efficient payment infrastructure for payroll.