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SMB Mobile Deposit: $90 Million Annual Revenue Opportunity for FIs with Solutions Addressing Business Needs

Monday, November 20, 2017 ( / Patti Murphy)

New research from Aite Group points to strong demand for mobile RDC among SMBs; willingness to pay as much as $20 a month for mRDC offerings that address business needs, save them time and money.
When it comes to selling mobile RDC to small and mid-sized businesses, most financial institutions are missing the mark by offering products originally developed for consumers. SMBs have business-specific needs, and they are willing to compensate FIs for mobile deposit products that address those needs with fee revenues and loyalty, according to a new white paper by Aite Group.
“Small businesses need more capabilities from mobile capture than most banks are providing. Their needs more closely mirror those of commercial customers than they do consumers,” explained Christine Barry, Research Director at Aite Group. Unlocking the Revenue Potential of Business Mobile Capture, a white paper prepared by Aite Group for Deluxe Treasury Management Solutions, details results of a July survey of 1,000 U.S. businesses generating $100,000 to $20 million in annual revenues. Barry elaborated on the survey findings during a November 8 webinar co-presented with Deluxe Solution Sales Consultant Russ Erdman.
Aite Group’s survey revealed a compelling case for banks and credit unions to offer mobile deposit to SMBs. Among the findings: 92% of SMBs still receive check payments; 65% take check deposits to FI branches at least once a week, and 29% make daily trips to deposit checks at branches. “While popular, this is not very efficient,” said Barry. “Time is an important asset for SMBs, and saving time and money on basic tasks like depositing checks can really add up over the course of a year.”
In fact, more than 40% of those surveyed by Aite Group estimated the time savings from switching to mobile deposit would exceed 4 hours a week. Assuming a $20 an hour employee is tasked with taking check deposits to a branch, that works out to $4,160 a year in labor savings, alone, from migrating those transactions to mobile deposits. “The savings are even greater when you factor in things like gas, mileage and time not spent on other things that generate revenues,” Barry said.
SMBs want more than to simply eliminate trips to local branches, however. They need mRDC features and functionality that address their business needs. Many need to capture multiple check images for single deposit transactions, as well as invoices and related documents, Barry said. Others are looking for solutions that can integrate with lockbox and update accounts receivables systems. They want the flexibility to move between desktop and mobile RDC, and the ability to configure solutions to specific business needs. They really need upgrade paths: solutions that can grow and become more robust as their businesses grow. Not surprisingly demand for these features and functionalities is greatest among younger business owners, particularly Millennials, Barry noted.
SMBs Will Pay $10-20 per Month for Right mRDC Solutions
The payoff for financial institutions addressing the mobile capture needs of SMBs is potentially huge. “Financial institutions think they have to offer mobile deposit for free. That’s not the case if they are providing customers with tools that help them better run their businesses,” Erdman said.
“We estimate that SMBs will pay between $10 and $20 per month for the right business mobile capture capabilities,” Barry said. And that willingness cuts across the entire spectrum of SMBs, from the smallest to the largest. “With just 30% adoption, business mobile capture could generate over $90 million annually in additional small-business revenues for financial institutions,” Barry said.
Financial institutions that ignore the burgeoning demand for mobile capture solutions among SMBs could lose out on more than just the new fee revenues, however, they could lose customers, too. Aite Group’s survey suggests nearly 1 in 5 SMBs (19%) plan to switch FIs over the next two years; at 26%, the itch to switch is even greater among businesses owned by Millennials. “A large number of businesses, regardless of size, consider an institution’s ability to offer robust mobile RDC when selecting a new financial institution. So robust mobile capture offerings are important for customer attraction as well as retention,” Barry said.
Need for Flexible, Omni-Channel Marketing
Yet, just having a solution that addresses SMB mobile capture requirements should not be the endgame for FIs. “Having the right product and value proposition is only half the battle. Banks also must get the message out,” Barry counseled. “Communication needs to evolve with customer and segment-specific strategies.”
Marketing mobile deposit to SMBs also should be a multi-channel experience. Creating and maintaining customer profiles is one way to ascertain the best channels to use, Barry said.
“Solution providers can help on this count,” explained Erdman. “We actually offer a Lead Accelerator program to all of our RDC clients that leverages our own internal call center staff.” The company reaches out to client’s SMB customers to gauge interest in RDC, and then forwards qualified leads back to clients for follow up. “This is also a great option if an FI has unassigned accounts or assigned accounts that don’t get a lot of attention due to lack of resources. It allows our customers to uncover the revenue potential of these accounts without having to do a thing,” Erdman said.
Deluxe has made the November 8 webinar – The Next Revenue Rush: Enhanced Mobile RDC for Millennial and Gen X Small Business Owners – available for viewing on demand. Click here for more details and to access.  Aite Group’s white paper – Unlocking the Revenue Potential of Business Mobile Capture – will be available in early December.

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