Business Banking’s Killer App?

A 2008 Online Banking Review newsletter article, Taking Internet banking beyond 101, contrasted Commonwealth Bank of Australia’s underwhelming new consumer internet banking features (such as finally giving customers the ability to view some information from different account types in one place) with non-bank online personal finance tools like Mint that automatically download, categorise, and report on all of a user’s finances every day, making it simple to reconcile transactions, set budgets and track cashflow.

This got me thinking; surely the banks’ business customers (particularly SMEs) would be able to save a lot of time and money if they had access to QuickBooks- or MYOB-type financial management tools as part of their internet banking.

The customer perspective

If all my accounts are with the one bank, importing data to a separate system each month to reconcile bills, invoices and payroll, and to track cashflow is a huge waste of time when this could all be handled automatically by my bank. And if my accounts are with multiple banks, the one that offers me built-in financial management would certainly make me think about consolidating with them.

My view is supported by Aite Group’s findings in connection with their report, Leveraging the Online Channel to Deepen Small-Business Relationships:

“Because 70% of small businesses consider a bank’s online capabilities when selecting their primary institution, it is essential that banks enhance their online offerings and add crucial capabilities to save small businesses time and add convenience,” [emphasis added] says Christine Barry, research director with Aite Group.

What’s in it for the bank?

1.) Many businesses would no doubt be willing to pay for these benefits.
2.) The rich customer data that these tools capture can be used for all sorts of valuable analysis – for example, to help uncover timely cross-sell/up-sell opportunities.
3.) In the current economic environment, facilitating accurate cash flow management and forecasting for customers will improve their chances of remaining solvent (and being able to keep paying for financial services).

It stands to reason then that smart banks will leverage existing technologies (such as XML) and their goldmine of customer data to improve their online banking systems to the point of being a “must have” for their business customers.

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