Positioning Business Mobile Deposit to Win with SMBs: The Devil’s in the Details

by Bob Meara, September 13, 2016
Industry Trends
North America

Abstract

Celent conservatively estimates 4 million US SMBs could adopt business mobile deposit if banks position and price the product effectively. This report shows banks how.

In the report Positioning Business Mobile Deposit to Win with SMBs: The Devil’s in the Details, Celent offers an analysis of a June 2016 survey of US small businesses designed to help banks maximize their return on investment in RDC.

The small and medium size business (SMB) market is of increasing interest among US financial institutions as an important and profitable customer segment. So is the idea of migrating expensive branch transactions to self-service channels. The advent of business mobile deposit, which became generally available in 2015, offers banks a unique opportunity to “kill two birds with one stone.” But doing so is tricky, because:

  • The SMB market is diverse, with widely varying affinity for business mobile deposit. Product and positioning will need to uniquely fit for the value proposition to resonate.
  • Banks have taught SMBs to expect free stuff. Thus, most SMBs expect business mobile deposit to be free, or at least have a very low price point.
  • Many SMBs already use desktop deposit (also known as commercial RDC). Unless they’re careful, banks risk cannibalizing existing fee revenue with business mobile deposit.

The survey showed that check acceptance remains widespread among US SMBs, but most SMBs don’t receive all that many checks. Historic RDC adoption followed the checks: higher check volume meant a business was more likely to adopt desktop RDC. But, more SMBs today utilize mRDC (launched in the past few years) than desktop RDC, which has been broadly available for a decade. This suggests both risk and opportunity for US financial institutions.

“Small business remains fertile ground for RDC,” says Bob Meara, a senior analyst with Celent’s Banking practice and author of the report. “There’s opportunity for fee-based revenue growth as well as massive transaction migration out of the branch. This is low-hanging fruit banks have been slow to pick.”

After a definition of business mobile deposit, the report takes a snapshot of the US small business market, with a focus on check acceptance, deposit behavior, and product usage. An analysis of surveyed SMB reactions to business mobile deposit concepts follows, along with a market opportunity assessment and recommendations for financial institutions offering or intending to offer business mobile deposit to SMB clients.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Defining Business Mobile Deposit

4

A Snapshot of US Small Business

7

 

Check Acceptance among SMBs

10

Banking Relationships and Deposit Behavior

12

 

Product Usage

12

 

Branch and ATM Deposit Behavior

17

 

Bank Engagement

19

SMB Reactions to Business Mobile Deposit

22

 

Attribute Importance

22

 

Business Expectations

27

Market Opportunity

32

Recommendations

36

Appendix I: Research Methodology

38

Appendix II: Survey Instrument

39

Leveraging Celent’s Expertise

44

 

Support for Financial Institutions

44

 

Support for Vendors

44

Related Celent Research

45

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