Sybases Andrew Mikesell on mobilising
cash management for businesses
By Andrew Mikesell, Sybase
How does corporate mobile banking differ from the retail mobile banking offering already in the market today? At the core is this question is how these applications are being used by end users.
In the case of retail mobile banking, the end user is a customer of a bank who is using the mobile banking application to access their account, check balances, move money, and pay bills. They may also use location-based services (LBS) to find a branch or ATM nearby. So basically, mobile banking for a banks retail customers is similar to internet banking on their phone.
However, a corporate banking users needs are different. Instead of checking their personal bank account information, they are using the application to help manage the finances of a business held at the bank.
Today much of this functionality is done through internet corporate banking applications, that present a rich set of information reporting and funds movement capabilities at the desktop. Corporate mobile banking frees the business cash manager from their desk, and provides much of the funds management functionality to the user while on the go.
Funds movement for business accounts at banks is much more complicated than retail banking. Often business banking funds have to go through a series of approvals, based on limits and where the funds are moving to and from. If a required person in the approval workflow is out of the office the financial management of the business for that transaction stops.
To address this, the business must then assign these permissions to another co-worker and provide the associated training. In small businesses, there often is not another person available to do these tasks. In larger businesses, assigning funds movement and decision privileges to another employee represents assuming additional operational risk.
Corporate mobile banking solves the risk, staffing, and transaction timeliness challenges for these businesses by mobilising this functionality. Now banks can not only offer their business users the ability to do approvals for Wires, ACH, and make pay/no pay decisions on checks to clear, but they can also view a snap-shot of their business account, positions, and cash flows.
Instead of running reports from their PC to determine which business locations need additional cash and which locations can sweep to the central account, the user can now do this business management functionality directly from their phone.
Businesses can also set up account alerts for key events, such as inbound wires funds availability. Once the user receives the alert, they can then initiate template business payments, such as payroll or merchant/vendor payments. Again, corporate mobile banking is addressing transaction timeliness through alerting.
How does corporate mobile banking help the bank? For starters, corporate banking mobility is seen as innovative by the end users, and that is brand attribute the banks are consistently striving to associate with the their brands.
Secondly, because of the immediacy offered through alerting and dependant transactions, banks can accelerate bank fee-generating activities, like ACH payments and Wire payments, for which the bank charges for use. And because the fee-based activities are now being immediately initiated as a result of alerting instead of batching up at the beginning and end of the day, the transaction flow through the system are much less lumpy, lowering the banks operational requirements around transactional window management.
Lastly, corporate mobile banking represents a new product for banks, for which they can charge. So in addition to innovation and fee acceleration, the banks are able to create new revenue opportunities.
Andrew Mikesell is product director for m-commerce at Sybase, an SAP company, and an industry leader in delivering enterprise and mobile software to manage, analyze and mobilise information.