I think we can all agree that internet banking has proved itself to be a BIG thing! And yet, banks seem to be way off the pace in terms of quality of service and functionality provided to corporate and business customers online. In fact, I would say that internet banking for business is in a ten year time warp. It feels similar to where retail banks were back in 2000 – when they were still trying to understand what customers would do online and figure out if they could make money from that new-fangled ‘inter-web’.
It’s strange, really. These are the business accounts that are worth hundreds of millions – you would think banks would be lavishing money on them. However, business and corporate banking has remained a largely person to person relationship business. Internet banking has been a hygiene factor rather than a differentiator. This is especially as, by and large, it is small business people or junior finance clerks who most regularly use online services.
But I think this is all about to change – and for a few good reasons (and this list is not exhaustive):
Banks are waking up to the fact they can save money:
- The cost of a person to person service is growing. As relationship managers have to care for larger and larger portfolios of customers, banks will have to beef up their online offerings to compensate
- Collaborative working tools will give banks the ability to work more efficiently with clients – which will save banks money and save customers time. For example, web-chat built in to internet banking will allow banks to share information with customers in real time – answering questions in one touch.
It is becoming apparent that internet banking can differentiate service and deepen relationships:
- Banks will be able to provide new functionality as a value add – particularly for top end users. By adding quality reporting functionality to online services and making it accessible via mobile / tablet devices, banks can deepen relationships with CFOs
- By offering broader ranges of functionality and more user friendly processes, banks will be able to help their business clients to save time and cut costs – particularly important in the current environment
Customer expectations have grown:
- Online customer experience leaders like Apple and Amazon – as well as retail internet banks – have raised the bar. Customers are already becoming frustrated that they cannot do the things they expect to be standard.
I recently co-authored a white paper on the future of internet banking for businesses – spanning both the corporate and SME markets. As part of that process, I spent time reviewing all the major business internet banks and talking to users – both small business owners and corporate users. This conclusively confirmed that users want a better service.
Users want banks to get the basics right – which many do not do today. Users want their internet bank to provide a decent user interface – with simple to follow processes, a convenient log in process and proper multi-signature functionality. SME customers want access to a greater range of functionality. Corporate customers want more configurability – and to be able to fulfil their foreign exchange and money market transactions for themselves. However to truly differentiate themselves, I think banks need to look to the future – to the services that customers don’t even know that they need yet – or that banks are too scared to offer (online corporate lending anyone?). As all the banks bring their online services up to the standard of retail banks, that is where I think the true differentiation will lie.
So internet banking for business is in a ten year time warp – but it is starting to fast forward. There are clear areas for immediate improvement (banks need to get the basics right) – but differentiation will be achieved through innovation. Banks need to move now, before they get left behind by their competitors and their customers.
Alex is a retail banking and internet / mobile / social media professional with over 10 years experience.
Alex joined Lloyds TSB in 2000. During his time at Lloyds, Alex worked in both product teams and distribution. In his first permanent role, he managed a customer service call centre team of 100 people. He went on to work in Lean Sigma for Personal Lending and strategy for General Insurance. He also held roles in Telephony and Branch Network Operations.
Over the last few years, Alex specialised in internet and mobile banking. He started as a change programme manager and then moved into product management. In his last role at Lloyds, Alex was the product owner for Loans and Mortgages across the Lloyds TSB, Halifax and Bank of Scotland internet banks – the largest internet bank in Europe.
Since joining IBM, Alex has held implementation roles with UK online banking clients. He has also consulted on Retail, Corporate and Business internet & mobile banking and social media with European and Asian financial services clients.