As summer begins, more of us will be taking some well-deserved vacation time, but business doesn’t grind to a halt just because you happen to be away from the office. That means more entrepreneurs and business executives will be relying on online and mobile banking tools to stay in touch with their business finances.
Given the need to access financial information in real time, what does the future hold for online and mobile banking? More importantly, how can these resources help business executives make better decisions for meeting their strategic goals — now and in the future?
Smart Business spoke with Susan Brown, senior vice president and Marketing Group manager at California Bank & Trust, about how online and mobile banking tools are helping executives not only access account information, but also provide sophisticated technologies for meeting complex business and treasury management needs.
Why has mobile banking become so important to business customers?
In today’s fast-paced business environment, you can’t afford to be out of touch with your finances. It’s become more essential than ever for entrepreneurs and their teams to have 24/7 access to a variety of business metrics, such as account balances, payables, receivables, cash on hand and more.
In the past, traditional online banking tools accessible via desktop PCs and laptops met these needs, but smartphones and tablets are now becoming preferred devices for accessing information. A recent report predicted that by 2014 smartphone shipments are likely to top 1 billion units, and that by next year sales of tablet devices will exceed sales of traditional laptops.
Data like this makes it clear that mobile devices are going to be key tools for business leaders to get more done in less time.
Has mobile overtaken online banking?
Mobile banking is not different from online banking — you’re just using a different device and tools to access information remotely. The more people rely on tablets and smartphones, the more mobile apps will grow in popularity. The most likely scenario for the near future is that most business users will adopt a hybrid approach, using traditional online banking tools in the office and mobile apps on the road.
Why is online banking expanding from transaction-oriented to customer-centric?
The best financial institutions are customer-centric. These banks focus squarely on strong relationships between their clients and business bankers. Clearly, customer-centric institutions want online and mobile banking resources and technologies to reflect and mirror those values.
Transactions are important, so of course online and mobile services need to support high-transaction volumes. However, the real value is banking experts helping clients make the best use of sophisticated tools to meet complex needs, such as cash management and fraud prevention. This is why a customer-centric approach will continue to be a focus.
Will the popularity of online and mobile banking impact the future of bank branches?
When online banking first emerged, many in the industry thought it might mark the end of branch banking. However, face-to-face contact is still important, especially in a business-banking context. Many transactions, such as those involving deposits and cash withdrawals, require a network of branches. There will be a gradual decrease in the number of branches, but branch banking isn’t going away anytime soon.
What online or mobile options are available?
Most people know they can pay bills online, check the status of payments and review balances, but there are other online tools that offer more sophisticated capabilities. For example, businesses can use advanced treasury and cash management solutions customized to meet highly specific needs.
What new capabilities under development could be used in the future?
Institutions are investing in user friendly and interactive websites, as well as introducing new apps that allow clients to service their banking needs from tools like mobile devices and iPads. As the capabilities of these devices grow and devices are introduced, banks will develop new, interactive ways to support their clients’ growing needs that complement the traditional avenues.
Susan Brown is senior vice president and Marketing Group manager at California Bank & Trust.
Mobile: To learn more about California Bank & Trust’s business mobile banking app, now optimized for iPads, visit www.calbanktrust.com.
Insights Banking & Finance is brought to you by California Bank & Trust
Seventy-five percent of small businesses have expressed that their financial institution doesn’t effectively understand their needs. As a result of this dissatisfaction, the banking industry is moving to more of a relationship manager model to service the small business segment.
“Banks are hiring full-time relationship managers who have a number of small businesses that they call on,” says Gary Wright, senior vice president, small business banking executive, at Cadence Bank. “These relationship managers offer expertise in the ‘business’ of small business, and also bring an understanding of particular segments and industries that can be extremely effective in identifying the right solutions to meet a small business’s financial goals.”
You, as a small business owner, have a person to call on if you have an issue — rather than an 800 number — and that banker knows who you are and is informed about the issues impacting your business, he says.
Smart Business spoke with Wright about choosing a bank and how relationship banking can give business owners the best service for their financial needs now and in the future.
As you begin to shop for a financial institution, what should you consider first?
First, you need to give thought to why you need a bank in the first place. Are you looking for deposit services? Do you need cash management solutions? Are you looking for loans or sound advice regarding what it takes to qualify for a loan or a loan that best fits your needs? While it’s important to evaluate a bank’s pricing or incentives, also think about the overall banking relationship that the bank is offering.
Look for a bank that can grow with you as your business progresses. You may only need a business checking account today, but what might your business need in the next five to 10 years? Think long term — approach the decision as you would consider any long-term investment. Do research to find a bank that is fiscally sound and will be around long term, as the industry deals with increased costly regulations.
Size is important, too, especially when it comes to lending. Regional banks generally can offer you more competitive rates compared with local community banks, as well as less bureaucracy and more personalized service than larger institutions. Regional banks often offer the advantage of online banking and treasury management services that can help increase your company’s efficiency.
How can businesses benefit from banks that are relationship focused?
Relationship-focused banks are concerned with building relationships with small business customers by focusing on the long term and incorporating forward-thinking strategy. Their bankers take an interest in you and your business. They want to know how you got started and about the successes and challenges that led you to where you are. They really dig deep into the nuts and bolts of your company to learn your business and financial operations so they can offer solutions that are specific to your needs.
With a relationship focus, there’s greater accessibility. Working with a bank that knows you and your business can speed up problem solving, for example, as the bank already knows your company and can easily inform you about the different options that are available. The bank can match the solution to the need, rather than just pushing a product. That’s the whole point of building a relationship with the small business.
As a business owner, you may often be on the go and require banking services that allow you to bank 24/7, wherever you are. What sort of solutions should you look for?
Technology is one of the fastest-growing areas in banking. You should consider a bank that is committed to technology, such as:
• Online banking that provides businesses with access to business online banking and treasury solutions.
• Mobile banking. As the number of smartphone users grows, coupled with the countless demands small business owners face daily, mobile banking is increasingly becoming a necessity. Many banks offer mobile banking apps and specially designed mobile sites that allow small business customers to access online banking services using smartphones or tablets.
• Text banking, where you can text your request and receive details on your account almost instantly. You also can transfer funds from one account to another via text.
How does the bank provide cash management solutions that take into account a small business consumer’s needs?
Generally, treasury management solutions cater to larger commercial businesses, but many of these services are increasingly in demand by smaller businesses. Treasury management solutions now are being structured to affordably help small businesses with their cash flow processes and protect them from fraud. For example, remote deposit capture services can allow you to deposit checks to your business checking account from your desk and are designed and priced for businesses with a lower volume of checks.
Whatever services you need, the goal of the relationship manager is to help you identify and enact financial solutions that will help your business prosper today and tomorrow. Small business owners are busy juggling numerous responsibilities, and it’s valuable to have a steward that understands your business and can provide the tools necessary to make the right
Gary Wright is a senior vice president, small business banking executive, at Cadence Bank. Reach him at (713) 871-3970 or firstname.lastname@example.org.
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Managing working capital and cash flow can be a complex endeavor. However, utilizing your financial institution’s treasury management resources can help you streamline the process.
Your banking partner can help you manage cash resources, accelerate collections, manage the payment cycle, reduce administrative concerns and mitigate fraud risk. Identifying how to accelerate collections and reduce expenses and disbursements by electronic means can even help you invest idle balances or pay down credit facilities.
“Businesses do not have to invest in software packages to accomplish this,” says Kerri Werschky, treasury management specialist at First State Bank. “Exploring the technology that banks have invested in to bring information to their clients quickly and accurately will not require companies to hire additional staff or make investments in technology.”
Smart Business spoke with Werschky about how technology can help businesses better meet their banking needs.
How have advances in technology improved the ways that businesses can handle their banking needs?
Through advances in technology, businesses are able to quickly communicate financial information to and from their financial institutions. With the advent of remote deposit capture, many companies are taking advantages of later deposit windows, simplified deposit creation and better record keeping.
How can remote deposit capture accelerate collections?
Companies are now operating with fewer resources and oftentimes are not able to drive to the bank daily to make deposits. Checks sitting in a drawer don’t help cash flow and availability of funds; those checks need to be in the account and quickly processed through the system for collection.
Remote deposit capture allows extended deposit cutoff times for same-day ledger credit and the convenience of scanning and depositing checks electronically from your office. This eliminates the need for your employees to drive to a branch in inclement weather and the liability of an accident, as well as unproductive time away from the office. In addition, a company with several locations can consolidate its banking relationships even if a bank is not located in the same geographic area.
Remote deposit capture provides quality control and data can be exported directly into your accounting system. With this image technology, businesses also have access to previous copies of transactions. Time and paper are saved because deposit tickets are not needed and a one-page report identifying the day’s deposit is available.
How do electronic payments reduce expenses and increase efficiency?
Reducing the cost of printing checks and the manual processing of paper items by using electronic, or Automated Clearing House (ACH) payments, can save money, as well as time. The most common use is for direct deposit of payroll, but there is an increase in the number of businesses that are focused on ‘going green’ and reducing costs associated with check stock, envelopes and mailings.
In addition to a robust ACH system, banks also offer an online bill payment service. Bill payment offerings in the past were reserved for consumers, but now commercial clients are becoming more comfortable with the service and leaving ACH or check issuance to the bank. As long as the business understands that the input date and settlement date are different and allows for a three- to five-day payment, the cost savings are significant.
While the three- to five-day payment settlement is at first of concern, once the business understands that the same delay applies by sending out checks, this becomes an obvious solution.
How can the bank and business work together to mitigate fraud?
Companies need to review their internal security and checks and balances policies. The bank puts control in the hands of the business — banks provide information through a highly secure website to a system that accommodates an unlimited number of users, and an administrator at the business can establish access and permission levels. By creating different access levels, the accounting staff has the ability to enter transactions so managers can review and approve them online. Each user’s identity is verified and companies can instantly add or delete employees when needed.
Positive Pay is a service whereby the company provides a check issue file to the bank with check number, payee and dollar amount when the checks are released. As those checks clear, the bank matches the items to the issue file the business sent.
If an item does not match, this is considered an ‘exception item’ and an alert is sent to the business advising it that it needs to review the check online and make the decision to pay or return, usually by 1 p.m.
Typically, the default is to return the item if the company does not give direction: It is presumed the item is fraudulent because the business did not advise it issued that check. In this manner, the business and bank work together to catch fraud before it hits the account.
These services can be implemented by your bank’s treasury management professionals and will most certainly help your organization operate efficiently and decrease costs.
Kerri Werschky is a treasury management specialist at First State Bank. Reach her at (586) 863-9485 or email@example.com.
Insights Banking & Finance is brought to you by First State Bank