With continued growth in consumer adoption of mobile banking, some banks are extending their existing consumer mobile offerings to small business clients, while others in the industry see an opportunity to create and monetize new, more sophisticated tools for business customers on the go.
San Francisco-based Wells Fargo ($1.2 trillion in assets) has offered mobile banking for its small business clients since 2007. Since its initial launch, explains Secil Watson, senior vice president with Wells Fargo Internet and Mobile Banking, the product has seen double-digit growth each month.
"The exciting part of being on the mobile side is the fact that customer adoption is rapidly changing," she said. "When we launched the service in 2007, we did a lot of things to optimize it for smaller phones."
Wide adoption of smart phones, including the Apple iPhone and RIM BlackBerry devices, has recently accounted for an increase in downloadable apps, as well, Watson adds.
"It's amazing the amount of adoption we see from customers," Watson says, "and the amount of demand keeps us pushing on the edge of innovation."
Mobile banking services for small business customers are parallel to those offered online, Watson says. Because a lot of small business owners also have personal accounts with the bank, they can expect a similar experience and set of functions between the small business and consumer mobile systems.
"Small businesses' demand for transfer functionality is probably very similar to consumers’, except they’d like to have more frequent transactions and higher limits to their transactions when limits are an option," Watson says. "We try to create solutions we can scale across both platforms."
Wells Fargo has also found that, when it comes to mobile banking, it’s important to ensure multiple options for customers — whether at the consumer or small business level — to access accounts. Because of that, customers have the option to access accounts through SMS, standard cell phone and smart phone browsers, and through a downloadable iPhone app. Watson notes that some customers — both at the small business and consumer level — have not been active in online banking because they do not have PC access.
"We also launched a service this year that allows customers to enroll in text banking without having to enroll in online banking," Watson adds. "Another option, not requiring a computer."
Larger businesses with Wells Fargo commercial banking accounts have access to an offering called CEO Mobile.
While not all banks offer distinct mobile services for small business and commercial customers, there is a growing demand, says Christine Barry, research director at Boston-based Aite Group.
"Small businesses are starting to demand mobile banking from their institutions," she says. "They're looking for that greater convenience, and many of them see it as an extension of their online banking."
Research published by Aite last year showed that some banks were slow to roll out mobile banking services because of a perceived inability to generate revenue through that channel. Additionally, many banks that do offer mobile services to retail customers, do not offer mobile services tailored to the needs of small business clients. The research found that mobile offerings for small business could potentially be a source of revenue for banks, with 27 percent of the small businesses Aite surveyed indicating they would be willing to pay for the service if it were offered by their primary institution.
"The small business is essentially an untapped market right now, and there is a lot of opportunity to generate revenue through them," Barry says.
Joe Spatarella, vice president, sales and marketing at OnlineBankingSolutions (OBS) is counting on the growing attention to mobile services for small businesses. His company seeks to bring small business functionality — multiple-user account access, entitlements, ACH payments, etc. — to banks with its Mobile Messenger Services.
"It’s been our experience to date that a lot of what gets handed to businesses tends to be repackaged consumer services, which tend to be very limited in scope and functionality," Spatarella says.
The aim of OBS' system is to provide banks with a multichannel approach to small business banking that harnesses mobile browsers and SMS at a more sophisticated level than what's currently available at the consumer level.
"We see this as a revenue generating product, not something you have to give away," Spatarella adds.
While there is potential to monetize mobile banking, Watson is more concerned at the moment with getting more small businesses to use it.
"Premium services always garner some amount of pricing leverage," she says. "You may want to bundle [mobile banking] with a larger package that has more traditional products in it, or attach it to a usage base or subscription model.
"Right now the service is free for our customers," Watson adds. "It was more important to drive customer adoption of this channel. The more engaged our customers are, the more we become their primary bank."