Treasury technology gets mobile

Smart mobile devices have led to a revolution in banking technology, enabling retail customers to access a wealth of services that would, in the past, have required them to enter a branch, speak to a call centre or use their desktop. All major retail banks now offer mobile apps to help individuals manage their balances, make payments, check their mortgage statement or even withdraw cash without needing their bank cards.

Cindy Murray, head of global treasury product platforms and eChannels at Bank of America Merrill Lynch (BAML) , explains: “Demand has been growing in recent years, but mobile banking for corporate treasurers is still relatively new. Since tablets have become widespread we’ve seen increased interest in this kind of technology.”

While mobile banking in the retail space offers relatively straightforward services that are easily translated to the small form factor of a smart phone, the needs of corporates are different and more complex and as such efforts have been largely focused on making apps and services suited to larger tablet screens to serve corporate treasurers.

“Banks are getting really excited about tablets,” says Christine Barry, research director for Aite Group’s wholesale banking practice . “I don’t think we will see many more advances in mobile banking technology focused on smartphones, it’s all about tablet development as the graphical capabilities they offer mean the technology in this space is advancing much faster.”

Obvious advantages of the tablet route include the ability to produce reports and charts that can be read without having to squint at tiny lines on a four-inch phone screen but also interaction through a touch screen, enabling corporate treasurers to dig into the details of their cashflows to get a better handle on the firm’s liquidity.

So what we have here is a startup built around the initial customer proposition that it would “replace” traditional banking with an online alternative. But the innovation is really in Simple’s approach to customer attraction and engagement. Behind the stylish website is the cold, hard fact that Simple has replaced the “traditional” customer-acquisition cost of – what would be a realistic guesstimate? – anything up to USD500, with that USD50. Although those numbers hadn’t been achieved when Simple first went looking for finance.

Identifying need Clearly, tablets offer a whole new way to access banking facilities but there is one outstanding question; to what extend do corporate treasurers really need to bank on the move? After all, they already use the tools available on their desktops, either through proprietary applications provided by their banking partners or cloud-based portals accessible through a regular web browser. With such tools already widely available, why are banks putting investment into expanding the mobile experience?

For BAML, when developing its mobile corporate banking platform it had to think about not only who would actually need to use it, but the kind of services they will need on the move. “The key thing with our offering is we don’t simply want to replicate the desktop experience on a tablet screen. It’s about providing a set of tools that are useful for a senior person who is likely to be travelling a lot so they can access vital services at the airport or when they’re at a meeting,” says Murray.

While retail offerings are focused on the mass market, banks have approached corporate mobile banking very differently, with a focus on providing tools aimed at the very highest level of user. The average treasury department worker would continue to simply use the services provided through existing channels because his or her job is likely to be primarily desk based. But for head of corporate treasury, who faces significant travel commitments and demands on their time, the ability to control and monitor cashflows and positions remotely could be invaluable.

For the globe-trotting treasury professional visiting the finance division of a local subsidiary, perhaps helping local treasury staff establish new banking relationships, what kind of services would help them do their jobs better, even while out of the office?

Barry believes it’s all about oversight. “Approvals are probably the most important thing for banks to provide via a mobile corporate treasury app. The treasurer may be travelling a lot but will still need to approve payments and transactions, so being able to do this on a mobile device is very useful. However, there are other complex feature they need as well, particularly focused around entitlements for different users and being able to dynamically modify them as required,” she explains.

Managing entitlements is not only one of the corporate treasurer’s key roles but it often requires attention at short notice, making it difficult to plan ahead and be in the office. If an employee needs to extend their ability to authorise a critical payment, or increase their credit card limit due to an unexpectedly large expense bill, he or she may not have the time to wait around for the corporate treasurer to return to the office.

Safety first Despite growing enthusiasm among banks, the slow uptake of mobile corporate banking to date also reflects security concerns on the part of corporate treasurers. Security is a big issue for corporates when it comes to adopting new technology and many solutions, including SWIFT’s 3SKey, have been developed to provide both the ease of use and the peace of mind they require.

In the mobile world, there are additional concerns, such the possibility of having information sent over wi-fi intercepted or the theft or loss of a device. “Security is a big issue. With our mobile offering, which is accessed through a web application, we have all the same security controls that exist in our online channel,” Murray says.

“Not only do we mirror all the security features of the online environment but mobile devices also have to be registered. This allows us to look at the unique physical characteristics of the mobile device and geographical access points to determine if the transactions are coming from an authorised person.”

This double layer of security means not only does the user need all their usual access codes and security tokens, but must also use a particular device, covering both loss of a tablet and the potential for wireless information to be intercepted.

Mobilising for the future The immediate future of mobile banking for corporates is primarily focused on increasing adoption rates. Banks are optimistic as more companies roll out tablets to enable their senior staff to work on the move. Aite’s Barry also expects new services to become available as banks ramp up their efforts in this space.

“We’re starting to see some multi-bank platforms come to market from independent providers so that treasurers with several bank relationships can manage them all from a single app or portal,” she explains. “We’ll also see existing services broaden their offering with additions such as tools to manage letters of credit and foreign exchange coming in the next couple of years.”

Other advances are expected to include country-specific services that adapt to particular regulations or different business models, corporate structure and culture. For example, BAML said it is looking at opportunities to adapt its mobile offering to make it more suitable to the Asian market.

Mobile banking for corporates seems destined for a bright future, driven in large part by the revolution in mobile computing that kicked off with the launch of the Apple iPad. Sibos has provided wi-fi access for several years of course. If you look over a corporate treasurer’s shoulder in Boston, don’t be surprised if she’s authorising a high-value payment rather than trying to navigate her way to the Corporate Forum.