Phoenix Synergistics Mobilizing Banking Services for Small Businesses

November 2021 | Payments, Deposits, and Transfers | Apps and Alerts | Cash Management; Innovative Services

Mobile banking is a growing and potentially lucrative space in the small business market for financial services. Recent Phoenix Synergistics studies have found that mobile business-to-business (B2B) payments and mobile point-of-sale (POS) payments are already used by notable numbers of small businesses, and users tend to find these services valuable. A smaller number of small business have used mobile bill payment, but nonusers express impressive potential for this service. Mobile remote deposit capture (RDC) and mobile relationship managers have shown the potential to shift interactions from branches to mobile channels, and opportunities remain for growth in adoption of these services.

Profiling current small business banking activity is an important step in assessing the overall potential of the mobile banking channel. Frequency of banking channel usage, activities performed, preferences for apps vs. websites, and the usage of mobile account alerts may vary among small businesses of different sizes and among those operating in different industries. Attitudes about various pricing strategies are other important considerations in this space. Are small businesses willing to pay fees or maintain high balances to use mobile banking services? Or should financial institutions view mobile banking as more of a relationship-retention tool that can boost customer stickiness to increase lifetime customer value?

Nontraditional financial-service providers, such as Square and PayPal, are well-established players in the mobile-payments-processing market and are now competing for market share of small business banking services. What do small businesses see as advantages of banking relationships with fintech companies and with traditional financial institutions? In this dynamic market, a deep understanding of the perspectives of small businesses is necessary. This study will give providers a better grasp of the mobile financial needs of their small business customers so they can better design, refine, and market mobile banking services for small businesses.

Research Objective

This study examines small businesses’ experience with and interest in mobile banking and payments, as well as their reaction to various apps, alerts, and pricing options.

Questionnaire Review

Clients will have the opportunity to review the questionnaire and provide comments. The cut-off date for client input is September 3, 2021.

Research Design

National survey – The survey will include 600 online interviews with owners and executives of small businesses with annual sales of $50K to $5M in industries including manufacturing, wholesale, retail, and services.

Project Report

The final report, available in late November 2021, includes a Strategic Insights commentary and executive summary, a Competitive Intelligence section, and full survey results section.

Competitive Intelligence

A profile of overall financial activity for a number of the top financial institutions identified as the respondent’s main provider will be included as part of the project report.

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