Why Banks Need to build a Business Banking App?

Posted by KMS Solutions on Sep 13, 2021 1:00:38 PM

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While mobile banking app for consumers has become a norm, business banking app is not really so. If you check on App Store or Google Store, you can see that only a handful of banks have mobile apps designed for business clients. Although most business banking activities still take place on desktops, banks cannot ignore the benefits of the mobile-first business banking app, which we will explore later on. 

In this article, we will discuss why banks need to build a business banking app. In addition, it will clarify the differences between mobile banking apps for businesses and consumers.  

With a digital banking experience that utilizes the advantages of mobile devices, banks have a higher chance of deepening relationships with their business clients.

Why Business Banking App is a Must

1. Improved Personalization

2. Better and cheaper communication with customers

3. Strengthened Security

4. Faster Processing

5. Utilization of mobile hardware and features

Reasons Why Business Banking App is a must for banks

1. More personalized

Personalization simply means treating users with communications customized by their interests, location, or past activities.

Thanks to mobile apps, banks find it easier to provide their business clients with a personalized experience. 

For example, banks can use A/B testing on the business banking app to try out different interface styles to see which works best. Or if the banking app connects to a Customer Data Platform (CDP), banks can build a unified profile of customers.

Mobile banking apps are also better than web app in tracking and observing user activities than desktop apps. Later, this data can be used to customize recommendations for users. The GPS in mobile devices can help the app identify the location of users to offer timely content based on their geographics.

2. Easier to communicate information with customers

Before there are mobile apps, banks relied on SMS to communicate information to customers. 

Those seemingly harmless phone messages are in fact extremely costly when sent by the ten of millions. It is reported that a small bank can spend up to 7 hundred million dollars each month on SMSing, whereas large banks had to cover up to a whopping amount of 3 billion.

In addition, SMS is not so user-friendly. Nowadays, people are already drowning in the flood of spam; to the point of feeling ill against SMS. Also, business clients of banks are mostly CEOs and heads of accounting. Busy with their jobs, these stakeholders won't have the time or attention to read, let alone open SMS.

A business banking app with pushed and in-app notification features can solve this problem.

Notifications in mobile apps are usually of two types: pushed and in-app notification. Both of them are much more effective than SMSs, or even emails. 

Delivered through the banking app that those CEOs and accounting heads download themselves, they will find those notifications more relevant and less intrusive. Being able to send useful and timely information is so desirable that notification is one of the major reasons why many banks want to have a mobile app in the first place.

In-app notifications are the notifications that pop up only when the app is being opened. On the other hand, a push notification appears regardless of what users are doing. 

 3. More secured

With the rise of eKYC, banks are under pressure to provide a fast plus secured onboarding experience. 

Given the limitations of desktop apps, such a user-centric online verification process can be impossible. Business clients want to create accounts and access banking services with as few actions as possible, together with a simple user experience. Findings by 11FS and Signicat revealed that 63% of customers abandoned an app altogether due to lengthy and troublesome onboarding processes. Banks have invested millions in marketing, only to have their customers stop dead at the very beginning.

Moreover, it is critical to keep fraudsters out. A rapid but vulnerable onboarding process can be extremely costly. According to LexisNexis, banks can incur up to 3 dollars for every 1 dollar of fraud.

Thanks to mobile apps, banks now can embed every eKYC capability, including fraud detection, liveness detection, OCR (optical character recognition), and more into the digital onboarding experience. For example, a mobile app with smart eKYC can allow users to easily onboard by taking selfies and the photo of required documents directly by mobile devices.

4. Faster

A business banking app can process transactions much quicker than its equivalent on desktops.

There is no shortage of reasons. A mobile app stores data locally on mobile devices. Quite the contrary, a web app relies on web servers to do so. Therefore, mobile apps perform data retrieval much faster than desktop apps. 

From the technical perspective, a desktop app uses javascript to function; while the mobile app leverages frameworks specifically designed for iOS or Android, making it able to can run up to 5 times faster than a web app. Even though these are all background processing, which is not directly visible, users can sense that actions are performed much faster from the front-end.

5. Better use of mobile device features

Another advantage of mobile apps is the ability to utilize mobile devices’ hardware components (camera, microphone) and software features (GPS, users’ contact lists). As a result, the business banking app can help provide a more intuitive digital banking experience for business clients.

Moreover, the app can also help users save time and effort. For example, during the onboarding process, users need to capture and submit their photos, which the mobile's camera can help.

What are the differences between a business banking app and a consumer banking app?

In general, a banking app for business clients has many similarities to that for regular consumers. But they also have many differences that are worth a discussion.

Users of business banking app need access authorization

Within a business, there are employees who need access to the banking app and those who don't. This is key to ensure regulations. Typically, a chairman or accounting head has the responsibility to provide certain employees with access to certain accounts of the business, which is called “access authorization”. 

Access authorization is a feature that can only be found in business banking apps, not in a regular mobile banking app for consumers. It allows key stakeholders to control and decide who has access to the banking accounts and the app features.

Role authorization maybe is not the first thing that comes to mind when banks design a business banking app. But it is key to the division of roles related to the business' financial decision-making. 

Business banking app has cash flow management

All businesses worry about cash flow since it is one of the most popular metrics for their profitability. Therefore, business leaders need the business banking app to help them with cash flow management in some ways. Cash flow management is significantly useful to business clients. However, most business banking apps lack it. 

At the very least, the business banking app should be as basic as providing real-time cash flow status. An advanced form for cash flow management in a business banking app is the ability to combine and analyze data about user activities to predict future cash flow. This requires an enormous amount of data to make the system reliable. But fortunately, most banks have enough data. Now they only need suitable data tools.

More than improving user experience, cash flow management can benefit the bank in its strategies for credit provision. Gradually, businesses clients who are users of the banking app will show reliable patterns of their cash flow. In turn, a banking app that analyzes data from customers’ accounts can help banks explore their clients’ short-term credit. 

Business clients need data reconciliation

Keeping accounts, paying suppliers, billing customers, and paying taxes is what every business does. These activities and their data are typically managed in different tools and systems. Businesses have to reconcile data from business banking accounts with those tools and systems to find answers to basic questions such as “did we receive payments for everything we sold?” 

A business banking app can help clients automatically reconcile data from banking accounts with accounting systems. Connected with such accounting software, the business banking app can become the center of financial management for businesses. 

Business Banking App has a very different usage profile

A business banking app, in essence, does many same tasks as a consumer banking app. 

In general, a business banking app will perform many of the same transactions as a consumer app. Or for example, most banking apps--either for businesses or consumers--have the mobile check deposit feature.

But a check deposit feature in a business banking app is different from that in a consumer app. Typically, a consumer will need to deposit only one check. Once done, the app will redirect the users to the account page. Contrarily, businesses might want to deposit numerous checks at once. Therefore, the business banking app will move to the next deposit after the previous one is completed.

If you want to learn more about BANKING APPS, download our latest paper about features of mobile banking apps

Must-have Features of Banking Application

Topics: Digital Banking, Digital Applications

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