By Geri Westphal and Ted Howard
For time- and resource-strapped treasurers, going mobile is getting better and better.
Mobile devices have become increasingly popular tools for consumers as they manage their banking, payments, and shopping activities. It’s been a little slower to take hold in the corporate world, but mobile is picking up as company tech departments get more familiar—and comfortable—with it; from BYOD (bring your own device) to authorized company devices and the accompanying array of platforms.
According to the Federal Reserve, approximately 40 percent of retail banking customers already use mobile banking, with many financial institutions expecting a significant uptick in the number in the coming years. This will likely be matched in the corporate world soon.
Mobile Tech Goes Mainstream
For corporate treasury departments, the advancement of mobile technology is a welcome tool amid day-to-day cash management tasks and overcommitted travel and meeting schedules. For today’s global treasurer, workflows need to be faster and more effective, allowing them to see global cash balances in real-time with accessibility to these balances from anywhere in the world. As such, the need for robust business continuity and data recovery is forcing corporate treasurers to take a closer look at mobile
functionality.
As such, many financial institutions are viewing smartphone and tablet technology as opportunities to enhance the client experience when it comes to mobile applications. According to financial technology provider Fundtech, this added real estate gives service providers the ability to consolidate a variety of mobile functions on one visual platform to further encourage its use. But it’s been a challenge to get a consistent “look” on these devices or channels, as they are known. And banks—in the corporate arena anyway—have not been giving clients the best experience across those channels.
Consistency? not so much
According to a Fundtech-sponsored Treasury Strategies survey, around 40 percent of treasurers nowadays use more than one channel when working with or accessing their bank accounts. And this number is expected to grow a lot in the next year or two. Treasury Strategies’ survey says 60 percent of treasurers will be using multiple channels by the end of 2013. “Driving this growth is the expectation of greater convenience and efficiency, and the expanded functionality being offered within … channels, providing the capability to manage all aspects of treasury operations.”
But at the moment that’s proving to be a challenge. According to Arun Ramamoorthy, vice president of product and cash management at Fundtech, fewer than 50 percent of banks have been able to offer their corporate clients a consistent mobile platform across devices. “That’s been the biggest complaint,” Mr. Ramamoorthy said. Banks have been—and in many cases still are—implementing new technology “just for the sake of it” without giving thought whether it works correctly on an Android- or iPhone-based smart phone, tablet or PC.
And banks have been compounding the problems by using different labels for the same function or service. For instance labeling balances two different ways depending on the device; i.e., on the iPhone version of the platform it might be an “open balance” while on the tablet version it might be “available balance.”
“What the bank offers has to be consistent in function and terminology,” Mr. Ramamoorthy said. The function needs to be “right-sized” to the device. But that’s getting better, he said, and Fundtech has been a leader in this regard, which is paving the way for more growth of mobile use. This is particularly true of the tablet, which Mr. Ramamoorthy calls “the best of both worlds” when it comes to corporate mobile banking.
more features, more mobile
In addition to payment approval and balance reporting functionality, the expanded real estate of a table device will allow financial institutions to provide real actionable business intelligence, including key performance indicators, account balances in different currencies, and other account-specific data to provide global visibility and decision making.
Activities like checking daily balances, wire transfer input and release, and review and approval of ACH batches are already widely used mobile applications. The next generation of corporate mobile banking functionality is expected to be more heavily weighted toward transactional and informational capabilities, moving from an information-oriented platform to something much more action-oriented. Tasks like bank account and signatory management are expected to become popular mobile applications as systems like eBAM become more main stream. The objective of eBAM is to remove the paper from the bank account management processes and enable corporates to access and manage their records quickly and efficiently via an online interface. Despite corporate enthusiasm for eBAM, adoption has been slow while banks and vendors work to implement systems that will accept eBAM ISO 20022 messaging standards.
What’s Stopping You?
One of the main reasons many treasurers stop short of using mobile for all functions is security.
According to strategy and research firm Javelin, identity fraud increased in 2012 for the second consecutive year. And the increase was driven by “dramatic jumps in the two most severe fraud types, new account fraud (NAF) and account takeover fraud (ATF),” the firm said. With billions of dollars potentially at stake the possibility of hackers gaining access to networks and accounts via mobile devices is enough to make tech departments hesitant to
support mobile use, BYOD or otherwise.
In a Spring 2013 pre-meeting survey, members of The NeuGroup’s Treasurers’ Group of Thirty-2 said they would be more willing to adopt mobile banking if some of their security questions were met (see chart below).
But institutions are starting to implement the latest in authentication technology, using a layered approach to ensure hackers do not break through the firewall. There are various levels of mobile security provided by banks, including:
- Client-Controlled Access—Users are enabled by their Security Administrator and privileges may be granted/revoked at any time.
- Registration & Out of Band Authentication—Allows users to register a single mobile device and confirm on the web, providing out-of-band authentication.
- Multifactor Authentication—Validates authentication using digital credentials in a variety of layers.
- Physical device like RSA SecurID® Token.
- User ID and password, specific to phone and user. In other words one employee cannot log onto his or her account on another employee’s device.
- Personal biometric information including fingerprint, voice, eyeball.
Add to this the fact that with the latest technology, nothing is stored on the phone, and access can be blocked remotely.
RSA tokens and user name/passwords has been used for years as the primary tool for granting access to online banking portals. But, as any treasury manager can tell you, with each individual bank allocating a different token and username/password, there can be ten or more tokens to carry and password combinations to remember, depending on the number of global banks used to access balance information. Fundtech’s Mr. Ramamoorthy said RAS tokens aren’t necessary anymore, although they give banks and others another level of comfort.
Tools like SWIFT’s 3SKey are being developed to address this issue. With 3SKey, just one token with a single password is sufficient to authenticate and approve transactions with multiple banks. According to the SWIFT website, it can be used on any electronic banking channel, web-banking, local and proprietary networks, and across the SWIFT network. SWIFT developed this technology several years ago as a multi-bank and multi-channel solution for corporates to securely authenticate and approve operations using digital signatures and strong authentication.
treasurers want to channel surf
Knowing your place in the pecking order of clients is critical for treasurers when it comes to banking services. But treasurers can also be picky about banks. According to consultant Treasury Strategies, corporates “are now selecting and grading banks based on their ability to meet a full suite of business requirements.” One of these is “the ability to transact and access information across multiple channels”—meaning at their desks and when they are on the move via laptop, tablet or smartphone.
“In the near future, questions about a bank’s multi-channel capabilities will certainly become staples of any complete banking services RFPs,” Treasury Strategies concludes in a recent mobile banking survey. “When asked how important multi-channel access was when establishing a new relationship with a bank, nearly half of corporates considered it very important.”
That means banks have to step up when it comes to their multi-channel offerings, making sure all channels are harmonized, synchronized and easy to use no matter what the device.
realtime fraud detectors
Also helping in the effort to thwart hackers and others are companies that will monitor the devices and the network. Companies like Digital Resolve and Trusteer can do live transaction monitoring, identity verification and login authentication. But certainly there are no guarantees that nothing will ever go wrong. And there is still the old-fashioned “willful” employee theft. But with some of the latest tech updates, mobile looks like a friendlier place to be for treasurers on the go.