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66pc of small businesses would switch banks for superior mobile services: report

Mobile banking is a driving factor for small business owners, but many banks are not keeping up with the demand, according to a recent report from ath Power.

While 66 percent of small business owners said they would be likely to switch banks for one with a superior mobile offering, 37 percent of bankers in the study did not even mention their bank’s mobile offering. The “ath Power Small Business Banking Study” points to a growing importance for banks to keep up with the demand from small business owners.

“We believe [mobile]’s going to be one of the sole key drivers [for small business owners],”said Frank Aloi, CEO of ath Power, Boston. “No. 1, they use it a lot. They use it almost twice as much. It’s convenient.

“Small business owners are doing everything from accepting mobile payments to applying for credit,” he said. “With the style of business that they have, to not be able to do this stuff on the fly and have it be secure is a big problem if it’s not offered by their bank.”

Small businesses
Small business owners are one of the key use cases for mobile banking. These businesses tend to need more flexible solutions that can used on the go and at any time in the day.

Additionally, mobile banking can be more cost and time efficient for smaller businesses since they do not have to spend time going into an actual bank or spend money shipping payments or forms. Instead they can focus on other aspects of running a business.

According to ath Power’s report, 10 percent of small business owners use mobile banking multiple times a day, 21 percent use it daily and 32 percent use it 2-3 times a week.

Overall, small business users use mobile banking more frequently than retail customers. They are also more willing to pay for mobile.

Additionally 33 percent are very likely to switch banks for superior mobile offerings, and 35 percent are somewhat likely.

Small business owners are also doing more banking on tablets in addition to smartphones. According to ath Power, more than 50 percent of small business mobile customers access mobile via tablets. One in three regard tablet banking as safer than smartphone banking.

Mobile banking
To keep up with these small business owners, banks need to be sure to constantly update their mobile offerings and innovate on the channel to improve the experience. If banks fail to keep up with mobile banking, they run the risk of losing these clients to other banks.

Small business owners want to be able to use mobile to check the credit worthiness of customers, accept credit cards and pay business taxes. These clients want to be able to do more on mobile, and it is up to banks to give them that capability.

Despite the demand, 37 percent of bankers failed to mention mobile banking at all in their conversations with business customers and 5 percent of bankers did not even know if their bank offered mobile to business customers.

“When we began providing research and information for this channel we were blown away by the people in branch who knew nothing about remote deposit and even if the bank offered it,” Mr. Aloi said. “Remote deposit capture is the No. 1 request from our survey.

“Like anything else, it gets lost, coming from executive strategy down to the front line,” he said. “Banks simply need to be more committed to it.

“For small business owners we believe that mobile will be one of the cornerstones of loyalty with a banking relationship. Banks should ask their clients. This is pretty simple stuff. You go out to the market and find what they’re looking for.”

Final Take
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York