It remains one of the great ironies in the banking market: banks make big investments in digital applications for the consumers who refuse to pay (“free checking!!”) and comparatively little investment in digital apps for the business customers who don’t
blink at reasonable fees. I can’t help but wonder how often business users, after a long day at the office, switch over to their bank’s mobile tools for their personal accounts and wonder why the experience is so much better. I mean, where’s the love?
And so I really enjoyed this post from Jim Van Dyke at Futurion Digital. It looks like Jim is going to do a webinar with ACI on the topic
of UX improvements in Business Banking — and knowing Jim, I’m sure it will be insightful. Futurion, and digital strategy and design agency Comrade, did an exhaustive UX
study of the largest 15 US banks recently that conclusively demonstrated that mobile app UX was an enormous predictor of consumer adoption.
But let’s start with a little quiz….
Of all payment mechanisms available to SMBs — cash, checks, cards, ACH, etc — which one is the most widely accepted?
If you guessed cards or cash or ACH then you’d be….wrong. Checks continue to dominate the payment landscape. As the graphics from a recent study on SMB technology
adoption from PYMNTS.com show, any perception that checks are rapidly disappearing is simply not true.
No matter how you look at it, checks will be very much a part of the B2B payment world for the foreseeable future. And yet, banks have been curiously slow to exploit the mobile channel for businesses despite the runaway success of Mobile Deposit on the retail
side of the bank. Why?
Since I spend a lot of time talking with bankers and technology providers, here’s what I notice:
- Inertia. Almost any new idea has to face this mighty obstacle. “We’ve always done it this way” and “Nobody is really complaining” are giveaways that inertia is exerting it’s anti-progress influence. And so business customers are forced
to drive their checks to a branch or an ATM (more on that later).
- Priority Contention. I’ve been in the mobile and digital banking world for a long time, and if five or ten years ago I were told that there would be over 17 billion checks written in 2015 I would have scoffed. I’ll wager that if asked to
guess the rate of decline of checks among their SMB customers, most banking executives would be off — and not by a little bit, but by a lot. This incorrect perception, fueled by the understandable inclination of industry writers and conferences to focus on
emerging mobile payment topics instead of established (and massively scaled) payment methods, creates some sort of reverse Pareto problem among banks: they are investing the vast
majority of their digital resources on unproven (but potentially disintermediating) payment methods while starving the methods their customers use most frequently.
- Competing Agendas. Banks got hooked on the scanner revenue drug many years ago, where they lease scanner hardware to local businesses to capture check images. While the bank’s leadership might love all things digital, the local bank manager
who has a revenue quota isn’t as excited to see the revenue stream for old, proprietary hardware rentals dry up.
- Unique Challenges. Depositing a check in a consumer app is pretty straightforward, but there are other considerations for the business app. How are permissions established and administered? Can multiple checks be deposited quickly in one
sitting? How can images of supporting documents — invoices, shipping notices, etc — be appended to the payment for more insight?
So what should banks be doing to pick up their business banking game?
- Get serious about mobile. Let’s lead off with the obvious: business mobile tools lag the retail side of the bank. Banishing business customers to a circa-1982 banking process (“drive over to our branch to deposit your checks — but don’t
forget we close at 5pm”) flies in the face of the tools available to the 80M+ US consumers who leverage Mobile Deposit in their day-to-day schedules. The idea that anyone today with a smartphone in their pocket would be steered by the bank to travel to a local
branch so that the bank can then pay a teller to scan the check is ridiculous. And yet it happens every day.
- Observe disintermediating forces. If “disintermediation” is the magic word to stimulate bank innovation in the payments world, then banks need to look no further than B2B network behemoth SAP/Ariba. They (smartly) see the dearth in mobile
tools available to SMBs and are moving in to fill the void — at the expense, no doubt, of many banks who are snoozing.
- Get greedy. Bad news: if you’re a business banker, you’re likely way behind where you should be. Good news: so are the banks you compete with. Better news: you’re already sitting on much of the technical infrastructure needed to pull this
off since your bank provides Mobile Deposit in the retail channel already. It wouldn’t take much to leapfrog your competitors and steal share. As Erasmus
said in the sixteenth century, “in the land of the blind, the one-eyed man is king”. Go for it.
- Integrate the latest. Focus on innovation. For instance, SMBs can now save time and effort by using the latest multi-check capture technology: business customers can quickly deposit a handful of checks in one continuous video session — in
many cases, even faster than they can with a scanner. Better yet, business documents can be associated with checks. Checks are batched into a single deposit with the option to add user fields such as invoice number) can be added as well.
Jim’s post expertly catches the tension and opportunity inherent in the SMB market for banks:
"Small businesses often represent the greatest mismatch between need, opportunity and willingness to pay, which is where banks in particular must ensure their UX is ready for problem-solving."
I couldn’t have said it better myself.