Viewpoint: Meeting the Needs of Digitally Connected Businesses on the Go

By Michael Branigan, Fiserv, and Marcus Rothaar, Raddon Financial Group

Consumers aren’t the only ones turning to mobile banking for anytime, anywhere access to financial services. According to the Fall 2015 Small Business National Research report by Raddon, nearly half of small businesses are using mobile to add a new dimension to their day-to-day operations, including on-the-go approvals and decision making. And as the size of the small business increases, so does the likelihood the business is using mobile banking: 58 percent of small businesses with annual sales between $500,000 and $10 million are using mobile banking.

Businesses, especially firms led by people who aren’t often behind a desk, need advanced mobile functionality. Simply repurposing consumer mobile solutions for business use misses the mark. In addition to account information, funds transfer and remote deposit, businesses have unique cash management and security needs, including requirements for multi-user entitlements, payment approvals and advanced authentication capabilities.

When executives are away from their desks, comprehensive banking capabilities, alerts and reporting and payment functionality keep business moving. Notifications let them know when transactions—ACH, wires, positive pay and internal transfers—need approval. User credentials and entitlements carry over to mobile banking for added efficiencies.

Financial institutions that meet the unique needs of digitally connected businesses stand to realize several key benefits, including greater profitability from commercial accounts. For example, Raddon found businesses that use mobile banking have more business deposit and loan accounts at their primary institutions and are more than twice as likely to seek a loan in the coming year, compared with businesses that don’t use mobile. Businesses that use mobile banking are also more optimistic about future growth: 70 percent expect growth in the coming year, compared to 49 percent of businesses that don’t use mobile banking.

Mobile=Keeping Customers

Mobile business banking also influences attrition. Commercial clients, especially younger ones, are looking for the convenience and 24/7 accessibility provided by mobile banking and are willing to go elsewhere to find it. Mobile banking is used by 66 percent of millennial-led businesses, and 58 percent of firms led by members of Gen X. Forty-one percent of millennial-led businesses indicate they would not use a community bank due to a perceived lack of online and mobile banking functionality. Of millennial businesses that don’t use mobile banking, 22 percent cite the lack of available functionality within their financial institution’s mobile banking platform. These results point to an opportunity for greater market share when increased mobile banking functionality is offered.

Commercial accountholders are looking for mobile banking solutions that mean business. According to Raddon, a third of small businesses use mobile apps designed specifically for business banking. The size of the business—and by extension, the depth of technology and functionality needs—greatly influences whether a business uses a business-specific app. Forty-five percent of businesses with annual sales between $2 million and $10 million use a mobile business app, compared with only 18 percent of firms with sales of less than $100,000.

Fifty-seven percent of businesses enrolled in mobile banking use both smartphones and tablets. Of this group, half access mobile banking more frequently with their smartphones, 30 percent are more likely to use a tablet, and 19 percent use both devices equally. While the type of interactions conducted often vary by device, digital banking users expect consistency across the many channels they use—that is, preferring the same accounts and account information displayed, the same passwords and preferences used, and the same look and feel.

Financial institutions must make it their business to provide intuitive, user-friendly mobile banking services and advanced capabilities that go beyond the needs of the retail user. Providing a seamless, optimized experience for business banking and payments will create a key advantage when competing for business customers and help commercial accountholders get the job done.

Michael Branigan has been a senior product manager at Fiserv for 18 years and focuses on developing Web and mobile business services for financial institutions. He holds AAP, CTP and PMP certifications. He can be reached at [email protected]. Marcus Rothaar joined Raddon in 1998. As a senior research analyst, he is involved in developing, analyzing and presenting Raddon research and providing strategic consulting for the financial services industry. He can be reached at [email protected].

In Viewpoints, payments professionals share their perspectives on the industry. Paybefore’s goal is to present many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.