Imagine personal banking before the ATM. Phone calls before the cellular telephone. Email before the smart phone. All were functional but greatly enhanced once technological innovations made performing these routine tasks even easier to do — anywhere, anytime. Now the same ubiquitous access and improved productivity are coming to treasury thanks to another technological innovation: mobile.
Mobile technology has transformed how people interact on both personal and professional levels. The global number of mobile subscriptions is set to exceed the number of people in the world this year1, and banks and non-bank institutions across the planet have been quick to exploit the potential for better, more efficient, real-time interaction and on-the-go capabilities for consumers — from mobile wallets to fully-fledged mobile banking. Like most new technological trends, the rapid pace of change in the consumer space is triggering innovation in the corporate world, and those organizations that aren’t getting on board are in danger of being left behind.
The mobile revolution has arrived and is only going to get bigger. In 2013, an estimated 590 million global mobile phone users employed their device for banking purposes. By 2017, that number is projected to exceed 1 billion.2 As consumer adoption of mobile banking and financial services reaches a critical mass, those same users are starting to demand the same functionality in their day-to-day professional lives. At the office, financial professionals expect mobile capabilities to help manage their payments, collections, trade finance and treasury activities, and new applications are being introduced to meet their growing needs.
Providing Always-On, Real-Time Access
In an increasingly competitive international environment, instant access to data is critical. Executives want visibility and access to timely financial information — which often includes a number of parties across wide geographies and various time zones — even when they’re not at their desks. Mobile capabilities provide that functionality.
With mobile, operations such as approving a funds transfer or even collecting a payment can be done on the road, and the technology is set to revolutionize treasury, trade, and payments in much the same way as the BlackBerry revolutionized corporate communications by allowing senior-level executives around-the-clock access to their emails.
“A typical mobile application for treasurers takes the internet-based online application and skinnies it down for a mobile or a tablet device,” explains Gerry Scalgione, Product Executive for J.P. Morgan’s Trade Channel platform. With such an application, users can set up mobile alerts for new transaction initiations and approvals. They can also access their transaction history: “You can inquire on any aspect of the transaction that you have with a bank; ‘I need an amount. I need a counterparty. I need to know when this is going to be paid. I need to know when I can ship that.’ There are endless possibilities. You can inquire on literally any transaction, nearly any point in the transaction and any data point,” adds Scalgione. The third key feature is approvals, such as the acceptance of documents or transaction authorizations. “Collectively, this is all around flexibility, productivity, changing business process and providing additional channels,” he concludes.
The benefits to corporate users are manifold: mobile access means speedier decision-making, improved efficiency and faster payments. It also means that corporate treasurers and decision-makers don’t have to be chained to their desks to carry out their day-to-day tasks — nor do they need to carry PIN token generators and laptops in order to get online.
A Flexible Tool
Mobile channels offer an add-on to office-based activity, providing always-on, real-time information, any time, any place. “Mobile offers flexibility. It allows people to have information at their fingertips at all times. I don’t need to be in the office, I don’t need to be sitting at my PC. It drives productivity and convenience,” says Scalgione.
The ability to track liquidity, measure counterparty risk, create forecasts and respond to changing markets while in transit will contribute to optimizing payments, decision making, and in turn, working capital.
“The functionalities treasurers are looking for, the ability to access account balances and execute transactions are particularly key,” says Brian Jou, Product Executive for ACCESS® Mobile, J.P. Morgan’s mobile application for cash management. “Increasingly companies are asking for multibank solutions which can aggregate balance information from a number of different banks in a single place, as well as for multicurrency solutions which can provide a global view of the company’s cash. In addition, treasurers want to be able to approve and/or release payments as well as performing other types of approvals, such as Positive Pay exceptions in the United States.”
And it’s not just treasurers who can take advantage of mobile. Mobile banking solutions are also being leveraged to improve collections and disbursement processes. According to Matt Vanhouten, Product Executive for Pay Connexion, J.P. Morgan’s payment collection system, “Service and Delivery Representatives can deposit checks using smartphones and soon large payers will be able to make payments to their customers using only an email address. These tools reduce costs and improve working capital.”
Balancing Demand with Risk
In light of all the advantages, mobile usage in the corporate space is beginning to accelerate, with a few first movers and early adopters starting to facilitate their everyday cash management and trade finance activity. Though most banks that offer mobile capabilities to corporates report less than 10% adoption and an average of about 6% to 7% of their cash management customer base using the product,3 these numbers are likely to grow as consumer acceptance becomes more widespread. In payment initiation for example, just 11% of organizations today use mobile technology4 — compared to 33% of consumers who use their smartphones to make a purchase5 — though this figure is set to triple over the next three years.
“Mobile for corporate banking activities is in the process of gaining momentum and no doubt will be as prevalent and widely used as it is in the cash or retail businesses for banking,” says Jou. “I think we’re on the cusp of the explosion into popularity now and it’s to the point where, like so many other things, in a couple of years people will be asking how they lived without mobile all this time.”
Banks need to take a lot into consideration when weighing the roll out of corporate mobile functionality, and so far many are still treading cautiously: only 40% of the top 50 U.S. banks are currently offering mobile capabilities, with just 56% saying they would by the end of 2014.6 While the risk profile is similar to online access, which has already been operating successfully for several years, there is reluctance both on the part of banks and on the part of businesses due to perceived security threats. In fact, 35% of corporate treasurers are “very concerned” about mobile security and are therefore unwilling to consider mobile.7
While treasurers are keen to have the convenience of authorizing payments remotely, they also want to have the confidence that those transactions are secure and that the person releasing the payment is authorized to do so. On the one hand, security continues to be a top priority for treasurers when using this type of technology — but on the other, treasurers are increasingly looking to improve overall efficiency and achieve more with their devices as companies become more comfortable with mobile. In light of these two priorities, banks are beginning to introduce additional layers of security in order to support particular mobile capabilities such as approving payments.
Using a mobile application is like a mobile browser: similar to logging on to a website via a personal computer, no information is stored on the phone or tablet device. “It doesn’t do anything that you can’t do on your laptop, other than providing the mobility. You can log in on a train, on a 3G signal, at the airport and even on planes. It just adds to productivity across the board,” emphasizes Jou.
Preparing for the Future by Boosting Productivity
Mobile platforms won’t replace office-based management systems; rather they will provide an extremely valuable extension, giving treasurers and key staffers the flexibility to do their job anywhere and at any time.
“The mobile aspect frees up managers and treasurers to make approvals anytime, anywhere, 24/7 without a PC,” adds Jou, who points out that the same individual making the approval is probably also the most interested in the financial supply chain and cash flow tracking, whether it be payables or receivables. “Mobile and mobile alerts are going to provide more timely information and the ability to manage cash more effectively.”
To keep up and remain successful, companies today need to be able to work remotely around the clock at any stage of the transaction cycle. Mobile, by its very nature, offers that capability — and given that almost everybody uses a mobile device already, the learning curve is not a steep one.
“The move to mobile is inevitable,” says Jou. As corporates increasingly start to add mobile to their arsenal of business productivity processes, the technology is gaining momentum. “We are fast approaching the point where mobile hits critical mass and people can’t do without it,” he adds.
With 40% of U.S. businesses expected to be using mobile in some form by 2015 — either offered to their clients or used by the corporate itself — adoption is happening rapidly and in some cases exponentially. Organizations that do not already have mobile built into their planning — as a product offering, internal management tool, or both — may miss valuable opportunities and risk being left behind by this technological revolution.
J.P. Morgan ACCESS Mobile Voice and Swipe Password AuthenticationDesigned to allow you to log on to your mobile device by using your Voice print and personal Swipe Password, this innovative security feature facilitates easy and secure cash management on the go. You will no longer have to carry a security token. Instead, you can leverage your unique voice print and swipe password for a secure logon while away from your desk.
1http://www.ericsson.com/res/docs/2013/ericsson-mobility-report-june-2013.pdf and http://www.theafricareport.com/North-Africa/mobile-subscriptions-to-exceed-worlds-population-by-2014-report.html
4AFP ePayments survey
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