But security concerns still an issue. More growth, security to come in 2012.
That payments processing and mobile tech firm Fundtech has been in the M&A news recently reconfirms the potential growth in the area of mobile treasury applications, particularly for corporate banking.
In late June Fundtech entered into a stock-for-stock merger arrangement with S1 Corp. That deal was subsequently put on hold as ACI Worldwide, a Fundtech competitor, offered to buy S1 at a 33 percent premium. However the wrangling works out, this M&A activity shows that companies are trying to elbow their way to prominence (or dominance) in a hot market.
And hot it is. Remote approvals, balance reporting, check scanning capabilities are today available via a variety of hand held devices, and the horizon for their continued adoption by treasurers is almost boundless. So while both bankers and practitioners alike agree that it is not a matter of if but when mobile banking will catch on, there is some speculation as to its timing. Corporate executives are interested but, given that the securuty hurdles have not been entirely overcome to their satisfaction, at what level?
Clearly, the interest level has grown: one recent survey showed 56 percent of treasurers have some interest in mobile banking. Meanwhile bankers flooded a Fundtech’s webinar on mobile applications for corporate banking earlier this year. Banks are putting significant research money into mobile banking systems development.
In anticipation of a rising demand and to be in the forefront, more banks have announced mobile banking platforms. However, many of these early applications are “one-off” configurations – bank account balance and transaction reporting for example, or remote approvals; and while they do provide some functionality, they do not offer a whole Treasury solution. One banker anticipates that the industry is one year away from full-scale roll-out of mobile banking options.
What’s happening? Smaller sized companies are utilizing the mobile applications more readily to jump on board, with leaner staffs and less approvers available. Traveling makes coverage that more difficult. Some developing countries also show initial demand, especially where a weak infrastructure makes mobile applications a more efficient and reliable way to get transactions processed. But generally, the larger banks are for the most part in the beta testing or pilot stages, and of course, more security holes need to be filled in for widespread corporate adoption to happen.
This concern is well warranted as some IT companies indicate that there is still too much room for fraud. This will slow adoption somewhat. After all, what treasurer will implement mobile payment approval of large-dollar value transactions or a payroll batch with sensitive information without security concerns put to rest? So “on the go” treasury is certainly attractive, but some questions on security need to be answered before it becomes a reality.
Clearly, the corporate world is more comfortable with technology innovations and the acceptance thereof then back in the early days of internet banking, when no one wanted to be the guinea pig. There is a whole new generation entering treasury (and other parts of the business) that did not know life before hand held communication devices — hence the consumer market being much quicker to adopt mobile apps.
As 2012 offers to bring complete mobile solutions to corporate practitioners, questions of security need to be answered. Protecting the assets of the company weighed against the quest for faster and easier access to bank systems.