Mobile Banking: Taking Care of Business

Mobile Banking: Taking Care of Business

Jan  12 
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Kim Becker  Senior Product Manager, Mobiliti Business, Fiserv 

Just like consumers, small business owners expect intuitive, easy digital banking experiences that fit their day-to-day experiences. Today's tech-savvy business owners look for innovative mobile banking products and services that work for their organizations, whether those innovations come from financial institutions or fintech startups.

To continue to attract and retain the small business segment, financial institutions are taking a hard look at their investments in the digital channel, specifically mobile banking. The most recent Small Business National Research report from Raddon suggests that effort likely pays dividends in retention, customer satisfaction and mobile banking use. The survey was conducted among approximately 1,200 small business owners representing firms of up to $10 million in sales.

Small Business Mobile Banking Influences Retention

Among small businesses in the study that use mobile banking, half indicated they are more likely to remain with their primary financial institution since starting to use the service. That finding is fairly consistent across business size.

Millennials are taking their place in the world, including becoming business owners. They expect their financial institution's digital business offerings to measure up to high expectations – or those millennials may go elsewhere. Members of that generation join Gen Xers in their preference for business mobile banking: 68 percent of millennial-led organizations and 51 percent of Gen X-led businesses use mobile banking. No matter who's at the helm, startups (69 percent) and growth firms (57 percent) are more likely than other businesses to use mobile banking.

In addition to likely improvements in retention, mobile banking influences the selection of a primary financial institution. According to a 2016 study by the Aite Group, 61 percent of small businesses are swayed by a bank's ability to offer sophisticated mobile banking and online capabilities.

Mobile Banking's Effect on Satisfaction

According to the Raddon study, 46 percent of small business owners feel mobile banking increased their overall satisfaction with their primary financial institution. As assets increase, so does satisfaction. Fifty-three percent of businesses with assets from $2 million to $10 million report mobile banking led to increased satisfaction, compared to 42 percent for businesses with less than $100,000 in assets.

Small businesses use a wide range of mobile banking features, including making mobile deposits (52 percent), approving payments (41 percent), and initiating ACH and wire payments (27 percent). Financial institutions that offer the mobile banking tools and capabilities organizations need are likely to see an uptick in satisfaction among their small business customers.

Mobile Banking Tied to Increased Use of Online Banking

Raddon asked small business owners that use mobile banking whether enrollment in the service has changed how often their companies use ATMs, branches and online banking. Only online banking use increased appreciably after enrollment in mobile banking. Forty-five percent of mobile banking firms use online banking more now than prior to adopting mobile banking.

Taking Care of Business

Mobile banking is how many organizations take care of business in today's fast-paced, interconnected world. As the needs of small businesses continue to evolve, an understanding of mobile banking's effect on retention, satisfaction and channel use can help financial institutions invest wisely in the digital channel.