The retail banking sector has used the technology to reach large numbers of customers while simultaneously reducing deployment and servicing costs for some time now. Mobile banking for corporates is now catching up.
Mobile banking allows the consumption of time-critical information remotely and on demand – whether this is instantaneous access to balance information, status updates on the outcome of major financial transactions or alerts that enable decision-makers to affect corporate decisions.
But the real potential impact of mobile banking could be even further-reaching.
Mobile banking is providing a faster, lower risk way for corporates to collect payments from customers. It can also help treasurers to make the most of their working capital, effectively lowering transaction costs and paperwork.
“New electronic banking channels coupled with mobile technology offer considerable benefits for corporates in terms of efficiency, cost and faster sales or procurement cycles,” declared Gautam Jain, global head of client access for transaction banking at Standard Chartered (StanChart) in an email reply to questions on October 9. “If a small company has to choose between paying US$50 to send a payment manually or a few cents to send it electronically, they will be happy to take the technological route.”
Additionally, mobile technology also provides treasurers with the ability to approve financial transactions directly, such as foreign exchange trading or wires, including those requiring multiple signatories.
This is particularly the case as the traditional ‘desk job’ involves less and less time spent at an actual desk – or indeed even in an office, note bankers.
“Corporate treasurers across the board – from those at multinational corporations (MNCs) to those at small-medium sized enterprises (SMEs) – are increasingly pushed for time, with increased travel commitments or the need to fulfil multiple roles,” said Marie-Caroline Domingo, head of client access for Asia at Deutsche Bank. “Given this, the ability to manage company transactions – including payroll, vendor management, and cash management and liquidity positions – from a mobile device is invaluable.”
“As a result, the mobile growth trend continues to make significant inroads into businesses and is an increasingly important and relatively new channel in the corporate banking space,” she said.
A recent Cisco report predicts there will be 10 billion smartphones and tablets by 2016, which substantially exceeds the United Nation's projected 2016 human population of 7.3 billion.
In order to capture this growing phenomenon, financial institutions ought to offer mobile technology that allows corporates to authorise payments remotely, thus increasing client mobility and making payments more convenient.
A recent study released by SunGard in June showed that banks lag customer demand for a multichannel experience.
Most consumers are prolific online and mobile users yet many of the surveyed banks do not offer a fully integrated multi-channel experience.Only34% of Southeast Asian banks currently have tablet offerings and most mobile banking offerings are still basic, while 63% of banks in Asia are now offering native applications built for Android or iPhone.
While the desired outcome is to see the rapid evolution of mobile banking, the influence of mobile banking will not play out identically in all countries and all markets.
The scale of its impact will depend heavily on the specific country’s current financial services infrastructure. Some bankers even believe that the rigid and conservative nature of some locally run companies, notably those operating in emerging markets, will prohibit the rapid development of such tools.
“The usage of mobile for transaction banking is more for informational purposes like transaction updates, event alerts rather than transactional in the Indonesian market,” declared Iwan Kamaruddin, general manager for transactional banking services at Bank Negara Indonesia to Asiamoney PLUS. “Not every client wants to do everything via mobile because that is not how things are done.”
“They prefer a more secure and transitional process,” he added. “There’s one thing called the auditor trail, where a corporate is able to look back at the transaction and have it tracked.”
The other concern is the lack of synchronisation between corporates and their counterparties in terms of cash management systems and processes. The establishment of a similar technology platform is essential in order for the usage of mobile banking to take off.
“Counterparties need to be using the same level of technology because there is no point of one corporate is on a higher level and there’s no similar standardised procedure with other players,” said Kamaruddin. “If I’m offering a service at this level of technology, but my customers cannot have that access feature or programme or application, it’s going to be difficult.”