June 5, 2019

Are You Ready for the Next Race in SME Mobile Banking?

By Claire Liang

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There are six things to help financial institutions warm up

In North America, over 99% of business are SMEs (Small and Medium Enterprise). Over half of them rely on mobile banking to access and manage their accounts. For millennial business owners, the reliance on mobile banking jumps to nearly 70%. This makes the technology used by a bank a key factor for SMEs when choosing which one to trust with their money.

However, the SMEs mobile banking market is still underserved. 34% of SMEs have never used mobile banking, even though their bank offers it. 69% don’t like the idea of using the mobile banking services offered by their banks. For SMEs, the current mobile banking solutions don’t seem attractive.

But what do SMEs want?

Growth and on-the-go solutions.

For a bank, these could be solutions to help SMEs grow directly, such as financing and cash flow management, or indirectly, such as freeing the owners’ time from administrative work.

How are the players responding to it?

Most banks in North America only offer basic functions on their mobile business apps, like account monitoring, transfers, and payments. However, innovative leaders are stepping up to the plate to expand their digital offerings to SMEs. Only in the last quarter of 2018, DBS, Royal Bank of Scotland, National Bank of Canada, and BMO announced various digital initiatives targeting SMEs. Startups such as Tide, TAB Bank, and KiWi are also seeking their share of the market.

Where can incumbents start?

Compared to startups, banks face more burdens and barriers in the digital field. Here are five things for banks to start when considering mobile banking for SMEs:

1 – Incorporate the future in today’s infrastructure design

Some banks provide an all-in-one mobile banking app for both retail and business customers, while others separate them. A dedicated app for each segment allows for better user experience with customized design and lean operation. Nevertheless, it could also mean duplicate efforts and slower updates.

2 – Get the fundamental rights

The worst user experience doesn’t come from the confusing navigations – but bugs. Go to the review section of a banking app in the app store to read the comments of outraged users who can’t log in or make payments with their mobile banking apps. Make sure you complete sufficient testing and have IT support in place before launching the solution.

3 – Take the low-hanging fruit

There are small features that are easy to add but help users a lot. For example, a “click and call” function which allow customers to call customer support in the app and automatically send their details. This would save busy SME owners from Googling the customer support number and repeating their information multiple times if they’re passed to different people.

4 – Respond to the customers, both technically and literally

Survey results show a direct correlation between customer satisfaction and the rate at which digital innovations or new digital features are introduced. Apps store offers the perfect way to listen to and engage with customers. For example, the National Bank responds to every review on its app store and maintains a high rating of 4.3/5.

5 – Differentiate through ‘leader’ solutions, or partnerships

These are some of the first-movers: DBS just launched Singapore’s first mobile-based QR payment collection solution. Barclays provides a free digital invoicing tool for SMEs on its mobile banking app. The National Bank of Canada partners with Thinking Capital to approve term loans online in just a few minutes. Royal Bank of Scotland is launching a cash flow forecasting service on its app-based SME banking account called Mettle.

6 – Skip ahead if it’s a late game for you

As the SME market booms, innovations on financial services beyond the basics, such as expense and credit cards, are on the horizon and less crowded. Divvy, which allows businesses to track their expense in real-time, just closed $200 million in its 3rd funding round in a year. Brex, the unicorn offering corporate credit cards to early-stage companies, is launching a new card that gives companies control on their employee’ purchases.

So, are you ready?

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