[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
Corporate Mobile Banking: Separating Hype from Reality [NACHA Payments]
Senior Analyst, Celent
Amy L. Johnson
Vice President, Wells Fargo
Synopsis from Conference Program
Mobile banking is generating a wave of excitement in the North American marketplace. While much of the emphasis is on the retail market, corporate customers stand to benefit tremendously from this nascent channel. This session provides an overview, based on independent research from Celent, of the latest corporate mobile banking technology trends. The state of mobile cash management solutions is examined through a different lens, by distinguishing hype from reality. This session provides a detailed picture of what future mobile cash management solutions will look like, as well as descriptions of key features and functionalities that will attract users to this blossoming technology. Finally, it will help banks to ensure that their corporate mobile customers are provided with the proper security and authentication mechanisms while maintaining ease of use. A case study is presented by a pioneering institution in the mobile banking service for business sector, including an overview of its solution, descriptions of functionalities, lessons learned and business benefits.
My Observations & Comments
This was one of the best sessions I attended – an ideal balance of research/industry observations from Celent and real-world experience from Wells Fargo.
Eighty one percent of corporate executives are linked to their office through a mobile device. However, in the US 40% of business people are connecting to their corporate email using a personal device (an iPhone or other smart phone that they themselves purchased). This poses security challenges for corporate IT and those that seek to promote mobile banking and payments for corporates.
Mobile is proven to be effective in driving productivity, enabling remote work, and connecting disbursed teams. According to Celent four trends will drive the adoption of mobile banking and payments for corporates: 1) the evolution of full featured devices, 2) "BlackBerry mania", 3) Faster networks that provide a better user experience, and 4) the increasing prevalence of data plans.
Yet banks are slow to adopt new technologies, and mobile banking is no exception. Many banks are cautious about mobile banking in general, let alone offering mobile services for corporate customers. Security is obviously a major concern. Moreover, most vendors focused on corporate payment solutions do not feature mobile solutions and most mobile vendors are focused on consumer solutions. And mobile solutions are still immature. It is not clear whether text messaging, mobile browser, or device applications will be the dominant interface (or some combination). Celent predicts that mobile applications will be dominant, despite the challenge of developing multiple versions for each phone model and wireless carrier. And, thus far, corporates are not clamoring for mobile banking.
Wells Fargo is the first bank to offer mobile banking to its corporate customers. Celent expects that seven additional banks will launch corporate mobile banking this year, and 6 more next year.
Wells Fargo believes that mobile banking and payments are inevitable and intends to lead in the mobile space. Their customers demand it and they have a mobile product road map to guide their progress. They are relying on text messaging and mobile browser for now, avoiding mobile applications (they are less enthused about applications than Celent is).
Mobile is particularly valuable for corporate clients as the need for dual controls and fraud prevention increases the number of approval steps for day-to-day payment activities. As the workforce becomes busier and virtual it is increasingly likely that corporate finance managers are away from their office (if only in a meeting down the hall) when they need to approve a payment or resolve a discrepancy/inquiry.
Wells Fargo's corporate mobile approach targets four types of transactions:
"Snack sized" functions (a Gartner term) – discrete tasks that take less than 5 minutes. The don't require enough time for it to make sense to boot up your laptop. You can do them while you stand in line, in between meetings, or waiting for your flight.
Time sensitive tasks – deadlines looming, expiring rates, or payments due.
Dual Control tasks – those that require two or more approvers, increasing the odds that one or more approver is away from their desk.
Fraud detection – utilize mobile to alert customers that there may be a real time fraud risk. Send just enough information to make a decision, or at least give manager an alert to phone the bank and learn more.
Wells Fargo is taking an incremental approach, rolling out "a little something every quarter" and involving its customers to get continuous feedback. The solutions are very simple and elegant. For example, if you are approving a wire using the web browser on your mobile phone and have a question about it, the phone number of the person in your company is included in the record so you can click to dial that person directly and ask a question. When you conclude the phone call, the browser session resumes so that you can seamlessly approve the transaction.
1) Involve customer service early. Train them to handle phone calls.
2) Do not expect high usage at first. It is a big shift for the customer. Use patterns vary from daily to occasionally.
3) Get your SMS short codes lined up early (lots of lead time necessary)
4) Be prepared to be nimble