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Monday, 21 May 2012 12:31

For small biz, mobile banking products offer convenience

Written by  Jayson Bussa
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For small biz, mobile banking products offer convenience Courtesy image
WEST MICHIGAN — Two years ago, Sheri Peters rarely had a client ask about mobile banking. Maybe one in 10, she estimates. 

Today, as seemingly everybody out there has a smart phone or an iPad, at least half of the small business clients of Macatawa Bank that Peters talks to want to know about mobile banking.

Although limited in its use now, mobile banking for businesses represents a major focal point for banks to serve their commercial clients as interest begins to grow.

"It's all about convenience. That's what the small business owner wants the most," saidPeters, VP of treasury management at Holland-based Macatawa Bank.

Macatawa Bank plans to launch a mobile-banking app for businesses this summer.

The app will allow small business owners to use their online banking service on their smartphone while away from the office so they can conduct a number of transactions such as checking account balancing, making deposits, paying bills, reviewing payable and receivables, transferring cash or approving payroll.

Bankers say small business owners are now just beginning to consider and adopt mobile banking in larger numbers to manage their cash flow and do their banking.

"So many business owners do their business from the road," Peters said. "They need to be able to do that from their phone."

The move follows the quick adoption of mobile banking by consumers. In a recent survey by the Pew Internet and American Life Project, one-third of respondents said they have used their cell phone to do online banking.

A March report from the Federal Reserve estimated that 21 percent of smartphone owners have used mobile banking in the past year and another 11 percent planned to do it in the next 12 months.

As consumers' use of mobile banking grows, banks are now looking to extend the technology to commercial clients and optimize services. Their primary focus these days is to develop and deploy more functions for their mobile-banking platforms, bankers say.

"To make these mobile applications a really strong viable product for our business customers, we're looking at these full extensions of their treasury platforms that they work with today so they can perform the most important types of transactions" on theirsmartphone, said Glen Getschow, senior VP of government banking and treasury at Huntington National Bank in Grand Rapids.

Huntington is working on a new mobile-banking service it targets for launch in 2013 that will fully integrate a business client's cash-management and treasury functions into a single application on their smartphone. When a company, for instance, receives an invoice from a customer, the paper document gets scanned and entered into the system. The new application will make the document accessible from a smartphone for processing and mobile payment.

"Tying the remittance document to the payment themselves is one of the next-generational things Huntington is looking at" for mobile banking, Getschow said. "When you go into connecting transactions together, and you can do that on a mobile environment, that's really going to bring this to the next level."

Taking mobile banking to the next level can aid business clients by offering greater convenience and helping them become more efficient, especially for those small business owners who spend a good share of their time on the road.

"If you look at productivity numbers, companies are doing more. If they are fortunate, they've been doing more with the same staff. If they are not so fortunate, they are doing more with less staff, so they have to find ways to be as efficient as possible, and part of that is using mobile devices," Getschow said. "You don't have to be tied to your office and you don't have to focus on the accounting side of your business by being in your office. You can focus on managing your business and dealing with the accounting remotely."

Mobile banking also allows businesses to make deposits "on the fly," Getschow said. He cites the example of delivery drivers who receive payment from a retail store upon delivery. The driver can use a smartphone to scan the check and deposit the payment immediately.

The emergence of mobile banking represents a "real game-changer" that can help small "mom-and-pop" businesses to better manage their cash, Getschow said.

"It's something that's just adding the convenience of being able to work from anywhere," he said.

The push for new mobile applications follows the emergence over the years of many other forms of electronic banking, including web-based services and "remote capture" that uses digital scanners that allow businesses to scan and deposit paper checks.

"It's a very logical, the flow that everything has taken the last five to 10 years," Peters said.

Mercantile Bank in Grand Rapids sought to take web banking to a new level earlier this year with the launch of BillPay+, a web-based service developed by Palo Alto, California-based bill.com that offers small businesses online invoicing, receivables and money management in a single application.

The service "has really developed into a nice value-added feature we can offer our customers," Chief Operating Officer Bob Kaminski said. "It continues to gain some nice traction."

Key to the BillPay+ software, as well as any other web-based financial service or mobile application, is the efficiencies it can generate for a small business by integrating with a company's internal financial systems.

"The more you can make them all talk to each other, the easier it is," Kaminski said. "You don't have these silos any longer."

While web banking has proven popular, mobile-phone apps for gbusinesses are only just beginning to get attention from businesses beyond the early adopters of any technology, bankers say.
"It certainly is becoming a normal part of the conversation," Getschow said.

Yet even amid that increased interest, many business owners have been hesitant to adopt smartphone banking technology to manage their cash because of concerns over fraud and security.

Garth Deur, president of Lake Michigan Financial Corp., the parent company of The Bank of Holland, said mobile banking for businesses is held back by the lack of the same kind of functionality as web banking, as well as lingering security concerns.

Some 70 percent to 80 percent of The Bank of Holland's business customers use web banking, versus a mobile banking rate in the single digits, Deur said.

"Businesses have a much stronger sense of the security challenges that are inherent in these mobile applications," he said. "I don't believe it has to keep them away and I do believe there are very secure ways to do mobile technologies, but just that concern for security has made the adoption in the business environment slower than adoption in the consumer environment."

While Deur and others expect mobile banking to gain traction on the commercial side of the business and grow, he said banks need to make sure that the technology doesn't replace the one-on-one relationship between bankers and their clients.

"There are very few issues that can be solved in an electronic channel," he said. "You can pay people, you can deposit money, you can move money, you can keep track of things, you can download information and you can share information, but when people have a problem that needs to be solved, then they need people.

"From a business model perspective, we don't ever want to lose that personal touch and that personal relationship because when people have a problem that they need solved, we want them to know who to talk to when they need a solution."

 

Read 2033 times Last modified on Friday, 07 December 2012 11:37

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