BROOKFIELD, Wis.—Consumers aren't the only ones turning to mobile banking for anytime, anywhere access to financial services, reports Fiserv, which points out that 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% of small businesses with annual sales from $500,000 to $10 million are using mobile banking, said Fiserv, referring to a report from Raddon Financial Group.
“Businesses, especially firms led by people who aren’t often behind a desk, need advanced mobile functionality,” Fiserv explained. “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.”
Financial institutions that meet the unique needs of digitally connected businesses stand to realize several key benefits, including greater profitability from commercial accounts, the company said.
“For example, Raddon found businesses that use mobile banking have more business deposit and loan accounts at their primary institution and are more than twice as likely to seek a loan in the coming year, compared to businesses that don't use mobile,” Fiserv said. “Businesses that use mobile banking are also more optimistic about future growth; 70% expect growth in the coming year, compared to 49% of businesses that don't use mobile banking.”
In addition, mobile business banking influences attrition, the Raddon study found.
“Commercial clients, especially younger ones, are looking for the convenience and 24/7accessibility provided by mobile banking – and are willing to go elsewhere to find it. Mobile banking is used by 66% of Millennial-led businesses, and 58% of firms led by members of Gen X,” Fiserv stated.
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% 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,” Fiserv said.
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 smartphone, 30% are more likely to use a tablet, and 19% use both devices equally.
“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,” concluded Fiserv. “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.”