For years, banks have been seeking the answer to the pressing question: how can they convert their small business customers from the low-margin retail banking platform to the higher-margin, higher-value cash management platform?
With so many small businesses, and the continual expansion of this market, the profit potential is huge. But try as they do, few banks have found a true motivator to get these small businesses to switch from a low cost banking service. Mobile business banking just might be the answer.
Research clearly shows that the small business owner is likely to adopt mobile banking applications. A survey Aite Group conducted in October found that 30% of companies with revenues less than $10 million would use mobile corporate banking services. These folks are often out and about during the business day: at a job site, a client's office, or just about anywhere besides sitting behind their desk, if they even have one. For small business owners, having access to banking information and services during the business day will offer an unprecedented level of control and convenience. And with the speed in which tablet devices like the Apple iPad are being adopted by small business, a new level of mobile productivity will take hold over the next five years.
Implementing a small business mobile banking service would provide customers with the ability to fully manage a small business' financials remotely through a user-friendly application specifically designed for a mobile device's operating system, like iO, Blackberry, Android, and Windows. Such applications will take advantage of the unique commands and functionality of the device and offer the level of security that is needed. (Believe it or not, a mobile app using a digital certificate is more secure than the browser on your desktop computer).
Mobility therefore is clearly an opportunity for bankers to attract new small business customers as well as to migrate existing ones from the retail to the cash management platform. Offering business banking services that can be managed via a mobile device is a compelling incentive that will indeed be noticed.
Considering the money spent on mobile voice and data services today, imagine what a small business would be willing to pay for anytime, anywhere access to the full array of business banking services that will make them more productive. Offering mobile business banking services is beneficial for both banks and their small business customers: banks can better serve the market and reap the benefits of higher-margin services, while small business owners can manage their banking with ease and accessibility from their mobile device.
George Ravich is CMO at Fundtech, a provider of transaction banking solutions including mobile corporate banking.