For a number of years now, many financial institutions have been all-in when it comes to developing mobile banking technology for their retail customers. In turn, many of those consumers - especially millennials - have embraced mobile devices as new channels for conducting their personal financial business. So why isn’t it just as easy for banks to offer mobile capabilities to treasury professionals, and allow them to experience the same level of efficiency and convenience?
Clearly, as more banks continue to develop and implement their mobile strategies, that day is coming. But there are still hurdles to overcome.
What’s Driving Mobile
Working remotely has become an everyday practice, and today’s corporate treasury professionals have a growing desire to be able to conduct banking activities in real time, anytime and anywhere.
The days of professionals being chained to a desk - and the PC that sits on it - are fading quickly. At many companies, professionals now head to the office with their laptops, grab any available workspace, and when they are “on the go” rely on mobile devices to communicate with colleagues and perform daily tasks. In addition, 9-to-5 has stretched into 24/7, with evenings and weekends now devoted to handling job-related tasks.
Millennials are particularly comfortable with this new business-life paradigm, and they are climbing the corporate ladder and will soon take the reins in treasury departments. By 2025 they will represent 75% of the global workforce. This shift is putting pressure on banks to begin offering more mobile functionality to corporates, these young professionals will soon be in a position to demand the same convenience and efficiency in their business banking as they have in their personal banking.
The most commonly used corporate mobile banking services today are notifications and alerts, followed closely by payment authorisation, according to a 2015 Mobile Corporate Banking
Workgroup study sponsored by Mobey Forum, a global industry association focused on mobile financial services2.
A typical scenario where these mobile capabilities might add value: A treasurer is away from headquarters visiting an outlying office. She’s also waiting for a large wire transfer payment to arrive in the company’s bank account. The payment will enable the company to fund an outgoing supplier payment due that day. The bank sends the treasurer a mobile alert, confirming good funds in the company’s account, and the treasurer is able to both read the alert and approve the outgoing payment on her smartphone. Simultaneously, a second financial executive at the company who needs to authorise the payment is about to board a plane when he is alerted to the pending payment on his smartphone and responds with his approval.
Payment initiation is in the next group of most-used mobile banking services, according to the study. Many banks already offer book transfer initiation on their corporate mobile banking apps, as well as the ability to send a wire transfer or Automated Clearing House (ACH) payment from a template.
“Mobile devices are being incorporated into ACH transactions already, and while their current use is fairly limited, corporate ACH payments utilising a mobile device are beginning to gain traction,” according to a 2015 white paper on the subject published by NACHA – The Electronic Payments Association3.
Advanced reporting and cash flow forecasts are also among the most used mobile banking features, according to the Mobey Forum study. These are examples of mobile banking services that tend to work better on the larger screens of a tablet than on a smartphone. According to the study, “many banks are now thinking about offering a limited set of services for smartphones and a much wider array of services designed specifically for tablets.”4
One of the first mobile banking applications for business was mobile remote deposit, which can, for instance, enable a delivery truck driver collecting checks from customers in the field to efficiently deposit those checks by phone, immediately. Another early use for mobile has been positive pay decisioning, which ensures that a treasury manager away from the office still has the opportunity to make a timely “pay” or “no pay” decision on any checks presented for payment that don’t match the issuance file provided to the bank.
Due to the many disasters that have hit U.S. business centers in recent years — particularly natural disasters— many treasury managers now are also looking to banks for mobile capabilities that can support business contingency plans. In situations in which treasury staff can’t get to the office, treasurers want mobile apps that enable their teams to execute critical functions.
What Businesses Want From Mobile
More than half (55%) of the corporate attendees at the 2013 Association for Financial Professionals (AFP) Annual Conference who responded to a Capital One Bank survey said they plan to be approving payments on mobile devices by 2016. They also shared the features they want in mobile banking services:
• Tight security and control. Corporates want mobile apps that enable them to tightly control account access, so that different employees can receive access to accounts for different reasons. They also appreciate mobile alerts to help intercept potentially fraudulent transactions in real time.
• Tailored functionality. They want mobile capabilities such as wire transfer approval and payment initiation, in addition to positive pay decisioning and remote deposit.
• Streamlined onboarding. New service onboarding, user administration and security credential management are vital for businesses when accounts are accessed by multiple employees. And their online and mobile credentials should be the same.
• Reimagined user interface. Businesses require tools that facilitate on-the-go decision making, such as data in the form of easy-to-read graphs or charts.
Overcoming Security Concerns
Security concerns appear to be the biggest issue for businesses. About two-thirds of the respondents to Capital One Bank’s AFP survey cited security challenges as the primary barrier to widespread adoption of corporate mobile banking.
If businesses can get past those concerns, corporate mobile banking will likely take off. And they should, since the security around corporate mobile banking is every bit as good, if not better, than what has been protecting online banking.
Mobile banking security typically features multifactor authentication. Mobile banking users must pass multiple challenges to prove they are both the owner of the mobile device and entitled to the account access they are seeking. In addition to something they know (user ID and password) and something they have (e.g., a security token), users may also be authenticated biometrically, for instance by having their fingerprint scanned.
There was a time, when computers were just becoming mainstream, that many treasury managers wouldn’t even consider conducting banking transactions online. But eventually the security became proven and online banking emerged as the industry standard. Expect the same to occur with mobile banking.
Ushering in the Mobile Era
Treasury managers can contribute to the ongoing development of corporate mobile banking technology and services by communicating their needs to their banks. It’s as simple as this: Think about your daily tasks as a treasury manager, and talk to your banker about whether a mobile banking service might enable you to do some of those tasks better or more efficiently.
By David Steier, Senior Product Manager, Capital One Bank