Exaggerated claims by technology vendors about their new products are a dime a dozen. But when Fundtech, a major provider of bank-transaction technology, recently announced it was rolling out “the first mobile platform designed specifically for corporate electronic banking,” it was hard not to take notice.
There are, to be sure, other players in the mobile corporate-banking business. Pyxis Mobile, for example, offers a broad platform of solutions for internal use by commercial banks and other financial institutions. And many banks have adapted applications designed primarily for consumers so business customers can use them.
But Fundtech is offering to banks, for redistribution to corporate accounts, a robust set of mobile cash management and electronic invoicing and payment capabilities. What’s especially notable is that the software firm’s sights are set not on the small companies — with no more than a few million dollars in annual revenue — that until now have generated almost all the demand for mobile corporate banking. Its primary target is the middle market: companies with up to $1 billion in sales.
The question is, will anyone care?
Fundtech’s Mobile ACCESSplus platform lets treasury and finance managers check account balances, transfer money between accounts, receive transaction-status alerts, approve transactions, create and approve invoices and payments, see when payments are coming in, make wire transfers, and track their liquidity, among other capabilities. An unnamed U.K.-based bank is said to be the first client for Fundtech’s new product.
The vendor hired a research firm, Aite Group, that polled 319 treasury executives worldwide, of whom 65% said that if offered mobile banking services, they would be at least somewhat likely to use them for such basic functions as checking balances and transferring funds. And 56% had at least somewhat of an interest in more advanced uses such as approvals and sending wires. “Clearly there is a demand in the marketplace; an unmet need that banks are not yet addressing,” says Aite research director Christine Barry.
But it’s rarely easy to tell how much stock to put in the results of product research paid for by the product’s producer. Survey results are influenced by the way participants are selected and questions are worded, among other factors.
Mark Feagin, director of treasury management for Iberia Bank, says he sees virtually no demand for mobile banking among midsize or large corporate clients. When the bank has queried customers as to whether they’d be interested in mobile features, they’ve shown some level of interest but backed off quickly when the topic got around to what it would cost them.
In the Aite study, 49% of the respondents said they would be “willing to consider paying” for mobile cash-management capabilities. But Feagin suggests that when the time comes to make a decision, they will finally decide that the value proposition is shaky. That’s because the people involved in day-to-day banking — CFOs, controllers, treasurers, head bookkeepers — “are office people. They’re not out on the road much.”
George Ravich, chief marketing officer for Fundtech, counters that they’d be out more if they could be. “These people are chained to their desks, because it’s a real problem when you need their approval on something and they’re not there,” he says. “Sometimes in those cases people go around policy, which is not very good either.”
Fears about the security of banking data on mobile devices also play a big part in companies’ reluctance to explore mobile banking. “The banking regulators haven’t jumped on this aspect of banking yet, but they are so heavy-handed now that you have to keep an eye out for them, [on top of just] worrying that you’re going to accidentally disclose information to the wrong people,” says Feagin.
Fundtech notes that its mobile platform is secured via REST (Representational State Transfer) application-programming interfaces, which have fast become the standard for connecting mobile devices to remote service platforms and achieving secure encryption. Web powerhouses Amazon.com, Google, and SalesForce.com all use REST.
Gartner analyst Stessa Cohen agrees that so far there hasn’t been much demand for mobile corporate banking. Still, she has talked to several large banks that are looking at it, driven by the strong consumer usage of mobile banking. “Customers want to do things at the time and place of their choice, so this will come to the corporate side,” she says.
That makes sense to Ron Box, CFO of Joe Money Machinery, who says financial managers will come to expect on-the-go banking in the same way most expect access to stock-market data today. “The ability to do real work from almost any location will become, for good or bad, the norm,” predicts Box.