Banks and credit unions have focused on mobile banking as a key consumer boarding and retention strategy. But in a May 2014 white paper, Riding the Digital Wave for Business Banking, Propelled by The Digital Opportunity, payment processor Fiserv Inc. questioned whether financial institutions (FIs) have done enough to implement mobile banking solutions for businesses.
A divide seems to exist between the number of mobile banking offerings and the amount of mobile banking activity conducted by businesses. Fiserv cited Aite Group LLC research that said only 32 percent of the top U.S. banks offered mobile banking for businesses as of mid-2013, while other 2013 research by Barlow Research Associates said 64 percent of small businesses and 82 percent of middle market businesses use online banking.
Some FIs don't offer a designated online or mobile solution for business customers, assuming wrongly that retail digital banking solutions will suffice. Fiserv suggested that tactic is self defeating because businesses will switch FIs for better digital banking solutions.; that is why FIs must tailor apps for their disparate banking needs.
"Businesses have unique needs for digital cash management tools and other advanced capabilities that are beyond the needs of the retail user," Fiserv said. "A complete digital business banking experience will deepen relationships with business customers and increase transaction volume and revenue."
Unlike consumer-focused mobile banking, apps for businesses must be highly differentiated. "Businesses have very different banking needs and expectations than consumers, and the solutions offered must reflect those differences," Fiserv said.
Business-based mobile banking apps have unique requirements around security and control because businesses are aware that large dollar amounts are at stake and employees are handling accounts they don't own.
"Businesses are more explicit about their expectations for online banking security features, such as strong passwords, multifactor authentication and device fingerprinting," Fiserv said. "They expect more proactive monitoring and notification of suspicious activity conducted electronically."
Businesses must have banking apps that allow for access controls as well. "[U]nlike consumer accounts, which are typically owned by one or two individuals, a business account could be accessed by multiple employees," Fiserv said. "So it's important for the business customer to know which individual [employee] made a particular transaction."
Businesses have some of the same expectations as consumers about banking app functionality, such as the ability to check balances and transfer funds, but they also desire specialized functionality, including wire transfer and automated clearing house transaction approvals, as well as positive pay decisioning.
Yet another factor to consider is the size of the business, with mobile banking needs differing among micro, small, mid-sized, mid-market, and large businesses. "For instance, micro and small businesses usually need to manage cash flow closely and value technologies like remote deposit capture and efficient online bill payment," Fiserv said. "Large businesses want visibility into their finances, including their cash position, and often value online self-service and control."
Businesses also demand features that facilitate decision making. "They require tools that enable their users to glean important financial information quickly, such as data visualizations in the form of statistical graphics and charts, as well as tools that help with forecasting, such as dashboards," Fiserv said.
The trend toward omnichannel mobile payments also must be considered, as businesses employ all the devices that consumers use, including desktop or laptop computers; mobile devices with browser access, downloadable applications and text messaging capabilities; and tablets. So mobile banking programs must offer consistency among multiple devices.
"Tight integration between the financial institution's digital banking platforms and with the core account processing system is critical to enabling this degree of consistency," Fiserv said.
But that is not all. Businesses require billing and invoicing capabilities, as well as auditing and reporting capabilities that help them meet internal and external compliance requirements. "Similar to their consumer counterparts, business bankers expect the ability to set up alerts that are customized to their needs," Fiserv noted.
Maybe a little farther down the road, Fiserv foresees expanded real-time payment options, payroll capabilities and POS transaction support. "These should all be considerations in building out a digital banking strategy that has staying power even in turbulent times," Fiserv said.
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