Blooming for Business


Demand and specialized systems are (finally) arriving for commercial mobile applications

By Elizabeth Judd

After a slow start in commercial demand for mobile banking applications, community banks are receiving significantly more requests for such apps from businesses, particularly for mobile remote-deposit capture, some technology consultants report.

Bob Meara, senior analyst at Celent, a Boston-based technology consulting firm, believes that most community banks haven’t had much interest in smartphone deposits with a picture snap-and-send from their small-business clients and therefore haven’t been keen to offer a special commercial application. “Until recently,” he says, “there hasn’t been much commercial client demand—at least not loud, raucous demand—so banks are busy chasing what’s right in front of their noses.”

Only in the past year have service providers begun rolling out mobile remote-deposit capture designed primarily for smaller businesses, and it’s frequently being offered as a component within a broader mobile banking application. Meara notes that within the past 18 months, roughly 10 banking software companies have announced mobile banking solutions designed for business customers and accessible to community banks and mobile remote-deposit capture is a cornerstone of these offerings.

Byl Cameron, a technology consultant with Carlisle & Gallagher Consulting Group in Dallas, applauds the development of more sophisticated mobile banking options for businesses. He says community banks should take a fresh look at offering a specialized commercial mobile application because such platforms are a potentially low-cost delivery channel that more businesses want.

“Mobile figures very centrally into where [commercial] customers want to migrate,” he observes.

Adapting apps

Previously, small businesses were “caught in the middle” of online and mobile remote-deposit capture adoption, Meara says. Although mobile solutions were first developed for retail customers, many of whom enthusiastically snapped up mobile apps, service providers did not lavish the same attention on corporations. That’s because larger customers were perfectly happy to invest in expensive scanners for online check deposits, knowing that they would recoup the investment from greater interest on the float. Smaller businesses, on the other hand, balked at the price tag for these scanners.

Although some small businesses are using retail mobile remote-deposit apps for their deposits, Meara says most of those apps haven’t fully met the particular needs of a commercial setting. He points out that small-business users want a full range of mobile banking capabilities—from fund transfer to bill pay, check cashing and online authorizations—but this group often has very different needs than individuals have.

Most retail apps, for instance, do not provide extra security controls to differentiate between employees who are authorized to perform banking functions and those who aren’t. “Having one person in the firm designated as the administrator of the account to determine who gets access for what is really different for commercial mobile, as compared to consumer mobile,” says Meara. He therefore is convinced that there’s still plenty of room for community banks and service providers to create innovative mobile solutions designed specifically for small businesses.

Meanwhile, Jost Hoppermann, a technology analyst with Forrester Research Inc. in Cambridge, Mass., believes that community banks should consider commercial mobile as a key piece within a multi-modal banking program. He points out that a small-business owner who phones in for banking support might encounter problems because no one sees precisely what he or she is doing.

If, on the other hand, a community banker talked with a small-business owner over the Internet or by videoconferencing through a mobile app on a smartphone or tablet, the experience would be far superior. “It’s human interaction as opposed to something anonymous, where you only hear a voice,” says Hoppermann.

Security concerns

As retail mobile remote-deposit capture has proven wildly popular and individuals have grown more comfortable using it, security controls for banks have improved, too. Hoppermann points out that mobile technology can be made far more secure with biometric controls such as fingerprinting and voice recognition. However, he says that the quest for greater security is often at odds with “the convenience of the customer.”

Cameron maintains that mobile banking is “in many ways more secure than browser-based online banking.” He says that individuals must go through a rigorous process before initially obtaining an app; in addition, the fact that people tend to use dedicated mobile devices reduces some security risks. Yet Cameron acknowledges that it’s difficult to know precisely how secure mobile banking apps are because these apps are still so new that there hasn’t been much time for problems to surface.

Looking forward, some technology experts say the possibilities offered by mobile are so compelling that community banks and financial service providers will find ways to ensure this technology succeeds. “I think mobile is a life-giving proposition, not just a nice-to-have,” concludes Cameron. “Once you’ve gotten people on a low-cost, convenient channel that has things like mobile check deposit you can really change the game and benefit commercial customers at community banks.”

Elizabeth Judd is a freelance financial writer in Maryland.