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Robb Gaynor Mar 17, 2015

Community banks find opportunity in business mobile

While mobile banking for consumers has become common, businesses are now demanding mobile banking services as well. Several large banks have met this need, most notably Wells Fargo with its CEO Mobile product, and now community banks are joining the market with their own offerings. This is an exciting new area of innovation, one where community banks are clearly very competitive with their large bank counterparts.

Mobile apps for businesses have seen high usage as they gain in popularity. According to our proprietary analytics, usage data from more than 245 financial institutions covering 4.5 million logins from 266,000 active mobile banking users, shows that:

  • Businesses log in an average of six times per week. They stay logged in for an average of 2:30 minutes per session and even longer on tablets, where session duration is 3:40 for iPad business end-users. This is almost double session duration for consumers.
  • 80% of business mobile usage is coming from iOS devices. iPad or tablet sessions constitute 25% of all usage, again, much higher than on the consumer side where iPads account for 5% of overall usage. Businesses seem to like the larger format of the tablet for conducting business transactions.
  • The top usage tasks for businesses via the mobile channel are checking balances, looking at transaction history, making internal transfers and depositing checks remotely.
  • The average internal transfer value is $2,000, and transfers are being made approximately three times per week. 

Inherited Entitlements

The days of servicing business clients with retail technology are gone. It begins with advanced entitlements. Businesses that have multiple users should be able to allow certain users to perform transactions while others can only view balances. In fact, many of the best business mobile solutions inherit these entitlements from the Internet business banking solutions. This dramatically reduces setup time for business mobile and ensures that the mobile and Internet channels stay in sync.

New features, such as approving an ACH payment or wire while on the go, which have little applicability for consumers, should be provided in business mobile apps. The required approval process is a perfect example of where mobile banking adds huge value to the business. In the past, approvals of wires and ACH were only available on the desktop through the Internet. Now, a business user who is responsible for approving large payments can be on the go when they receive a notification that a payment is pending and complete the transaction, all while out of the office.

Other features such as seeing positive pay items and releasing them for processing can add tremendous value to how a bank services a corporate customer. Viewing e-statements or paying bills with business bill pay are additional examples of conveniences needed by businesses. All of this must be secured with advanced features that are already in place on the desktop, such as the use of tokens for login or out-of-band authentication for high risk and high value transactions. In fact, security for business mobile is paramount, as the risk of fraud is potentially higher than in the consumer channel.

What type of services are coming in the near future? Similar to consumer mobile banking, business mobile will reach parity with the desktop platform. The ability to originate ACH payments and wires and the ability to see advanced balance reporting or perform administrative tasks will soon be available to business mobile users.

In 2015, business mobile will be equal in functionality to the desktop due to high demand. A business wants to use the superior interface available through a native application either on a smartphone or tablet. As with consumer mobile, the native app experience is more targeted and easier to use than traditional Internet business banking and is giving the businesses options.

Lastly, even account opening can be brought to the mobile channel. Businesses can “self-service” and open new accounts through a smartphone or tablet. Using the advanced cameras available on mobile devices, a company can snap photos of the business owners and with minimal effort open and fund new accounts both on the deposit and lending side. This applies to both new customers and to existing business customers who are looking to expand their relationship with the bank.

The return on investment is clear and simple when it comes to business mobile. First, there are additional fee opportunities, such as in mobile approvals, which represent added value to a business. Business mobile should increase the overall usage and engagement of a corporation conducting business with a bank. These companies will become “stickier” and will bring your institution more business.

In most cases, business mobile can be launched with minimal effort. Internet banking vendors tend to be the source of these solutions and are making them available for only incremental cost increases to the banks. From launch to having an app in the App Store in less than two months, a community bank can demonstrate to its business clients that it can meet the demands of the marketplace in a timely manner. The days of trying to “shoe-horn” a business onto a retail platform are gone, and business mobile is going to transform how a company interacts with its bank.

Mr. Gaynor is chief product officer of Austin, Tex.-based Malauzai Software, a provider of mobile banking SmartApps for community financial institutions. He can be reached at robb.gaynor@malauzai.com.

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