Mobile-izing Small Business
Earlier this year, Bank of America announced that it had surpassed one million small business mobile banking users, representing one-third of the institution’s three million small business banking customer base. This is likely a continuing trend among the nation’s 28 million small business customers. Already, these customers use mobile services more frequently than the average retail customer, with almost two-thirds of them logging into mobile banking at least twice weekly, according to our recent study.
Small business owners are about as likely to access mobile banking services while at home or in their office as they are “on the road.” This suggests that mobile banking has begun to rival online banking for the attention of business customers in environments where both online and mobile banking are likely to be readily available, i.e. home and office. The implication for financial institutions is that they will need to provide a mobile customer experience that compares favorably with the online channel. In fact, according to our study, two out of three small business customers would consider leaving their current bank if they found an alternative with a superior mobile banking offering.
So what can banks do to increase usage and better serve their small business customers through the mobile channel?
Put more focus on tablets. Our study found that one-half of small business mobile banking customers access banking services using tablets and that two out of three such tablet users typically take their device with them when away from home or the office. Findings also revealed that many view tablets as “safer” than smartphones for conducting banking business. Keeping that in mind, banks may want to consider providing banking apps for their business customers that are specifically designed for tablets.
Offer the features and functionality your small business customers desire. Small business mobile banking is relatively new and remains under-developed, with most banks focusing mainly on their retail mobile banking applications until just recently. Looking ahead, mobile adoption and usage by the small business customer will accelerate, as capabilities are added and emerging technologies are deployed, including:
Remote Deposit Capture. Arguably the mobile banking feature that has attracted the most attention from customers to date is remote deposit capture (RDC). As its rollout continues across the banking industry, roughly half of the small business mobile customer-base has used RDC within the past year. Among those who have yet to try it, the most common reason for not doing so is that their financial institution does not yet offer it.
Voice Authentication is a system that verifies a caller’s identity during the course of a conversation by recognizing the caller’s voice and speech patterns. Given that almost half of the small business mobile customer base is discouraged from using certain mobile banking capabilities due to concerns over security, voice authentication may have a role to play in allaying those fears for at least some users. In fact, almost one-half of small business customers say that voice authentication would encourage them to use more mobile banking services, such as funds transfers and bill payment.
Voice Recognition (using voice to interact with mobile services, rather than typing or swiping on a mobile device) has been introduced at a small number of financial institutions, for use by retail customers. Our study indicates that it would also attract more customers to mobile banking and encourage greater utilization of mobile services by the small business customer.
Mobile Photo Bill Pay has recently been deployed for use by retail mobile customers at several banks and credit unions. It may have particular added appeal to small business owners, who are typically hard-pressed for time and would value the potential time-savings associated with photo bill pay. Previous studies conducted by ath Power indicate that small business owners are especially receptive to services that save them time.
Continuously improve your mobile offering. A large proportion of small business customers are using the mobile banking tools that are currently available to them, but they are definitely ready for more. In fact, there is a gap between the mobile services offered to these customers and the features and functionality that they actually want. The most desired tools for which mobile access is particularly limited include: checking the credit worthiness of customers; accepting credit cards; and paying business taxes.
Banks will need to continuously improve their small business mobile offering by identifying and adding these types of capabilities or risk customer attrition to competitors with superior offerings. Not to be forgotten is the need to ensure reliability and ease-of-use with these tools. Even amongst the largest banks, technical issues, including possible denial-of-service attacks, can bring down or considerably disrupt mobile banking service for the entire customer base. Overall, almost one-half of small business customers reported they encountered technical issues with their mobile banking service over the past year, a cause for concern.
Mr. Aloi is president and CEO of ath Power Consulting, which is based in Boston and Washington, D.C. and is a full service marketing research firm providing demand-side research and training solutions to banking and financial institutions. He can be reached at [email protected].