“It’s about options and accessibility,” says Paul Taylor, Head of Regional Sales, Global Transaction Services (GTS), EMEA, Bank of America Merrill Lynch (BAML), describing the essentials of a mobile treasury solution. Taylor is keen to point out that making available an alternative to desktop treasury is not about replacing one channel with another, but about augmenting the existing model. It is a laudable goal, yet 82% of respondents to Treasury Today’s European Corporate Treasury Benchmarking Study 2012 said they had not adopted mobile and only 12% said they would consider using it somewhere down the line.
Enabling financial professionals to access and use company data whilst away from their desktops can, admits Taylor, be seen as “trying to solve a problem that does not exist”. In defence of mobile treasury, critics probably said the same thing about the motor car. Indeed, a revolution has to start somewhere. If the first faltering steps in a new direction are seen as a gimmick then so be it.
Indrajeet Maitra, Head of International Cash Management, Asia at BNP Paribas, is an advocate. He notes that the advent of global supply chains with high interdependence has added “another level of managerial complexity” and that on this basis, the industry is looking at every opportunity to “build bridges” between different functions like purchase, inventory management, payments and foreign exchange. “And mobile treasury nicely fits into this new environment.”
The wholesale adoption of mobile devices in the consumer space – smartphones, PDAs, tablets et al – has seen the technology shift from a ‘want’ to a ‘need’. This gives it two distinct advantages, if and when it moves more fully into the treasury sector: rapid development of the underlying technology is assured; and there is a user base that has already bought into the basic concept of doing things on the move. Maitra feels that in the Asian markets there is already a “willingness, ability and need to take decisions on the go”, the option largely being taken up by the so-called Gen Y age group.
Generations and geographies
Nick Diamond, Head of Cash and Payment Sales, Commercial Banking, Lloyds Bank, believes in the slow but inevitable shift within the treasury sector towards mobile operations. He too sees a new generation of people coming into treasury that are “comfortable working with mobile because it is the way they lead their personal lives”.
Diamond reasons that if mobile devices are used to make consumer transactions on a day-to-day basis, why wouldn’t they eventually appear in business life? There may be a gap between the slick presentation and user-friendliness of a consumer mobile app and that of a business-dedicated portal, but that gap is narrowing. “There is often an overlap between what people do in the personal and business space, and eventually they tend to influence each other,” agrees Maha El Dimachki, Head of Corporate Sales, GTS, EMEA, BAML. Transferring the consumer experience to the working space will be the way forward; it’s what people are used to and they need to feel comfortable using this technology if it is to take off in any meaningful way.
Whilst El Dimachki observes that many treasurers are already happy to carry out certain limited functions on a tablet-style device, some geographic markets are more receptive to the overall concept of mobile transactions than others. As ever, it starts with the consumer segment. Asian countries such as India, Korea and Japan are, she notes, extremely well-disposed to mobile activity. Providers are willing to deliver the necessary solutions to take it further too. Indian mobile payment (m-payment) solutions vendor, iKaaz, for example, launched its own ‘Tap & Pay’ reader in July this year, enabling cashless transactions based on near field communication (NFC) technology. Earlier, in April, DBS became the first bank to offer an NFC-based virtual credit card to customers of all three mobile network operators in Singapore with its DBS One.Tap.
China too is moving rapidly forward with NFC technology, announcing in April this year its proposed specification for a national m-payment standard. China Mobile, which is the world’s largest mobile network operator, and the domestic bank card association, China UnionPay, went live in June with an NFC payments service supported by eight banks, including some of the country’s largest such as Bank of China, Shanghai Pudong Development Bank and China CITIC Bank. Others connected to the platform so far include China Everbright Bank, China Minsheng Banking Corp, GF Securities, Bank of Shanghai and Bank of Beijing.
There is undoubtedly a very healthy appetite for consumer m-payment services in some Asian markets. A June 2012 survey of the sector across China, India, Indonesia and Malaysia by the Asia Pacific office of consulting and research firm, Analysys Mason, revealed that 65% of those who used their phones for non-voice services claimed to use mobile banking (m-banking), 51% used m-payments and 47% used mobile commerce (m-commerce) services.
The dominance of consumer payment devices such as cash, cards and especially cheques is slowly being eroded by m-payment concepts such as ‘tap and pay’ in some countries. But, says a March 2013 KPMG report, ‘tap and pay’ NFC solutions have generally failed to spark consumer interest. “Until silos are broken down, and there is collaboration across the value chain between merchants, mobile phone companies and financial services organisations, the mass audience will remain unconvinced,” says it’s author, Mark Guinibert, KPMG UK Head of Customer and Channel Management. Recent research by TNS Global shows that 11.9% of UK consumers use their mobiles to make payments and just over 20% use m-banking – a fraction of current levels of Asian uptake, but nonetheless a sizeable chunk of business.
Retail therapy
With this in mind, Diamond warns that businesses – certainly retail and utilities-based operations – need to understand how consumers are behaving differently in the sales cycle. The smart ones have been re-designing their business model to accommodate these shifts in behaviour. As Taylor says at the beginning of this article, it is about presenting options.
What does this have to do with treasury? Well, the progress of technology from consumer-user to business-user is self-evident, but if consumer behaviour changes to the point where people take their mobile device shopping with them – not just to make payments but also to research prices, order remotely, receive and respond to context-specific targeted offers and so on – the speed of movement and change of payment traffic has more immediate implications around cash flow, cash forecasting and even funding requirements. “More so than ever, the treasury group cannot act in isolation,” warns Diamond. “It will have to get much closer to its commercial departments.” When a payment is made electronically there is always a data footprint attached. This data can be used to steer the business in its response to buying and payment behaviours, as well as product and service delivery models.
But there is a direct potential use of the mobile device for treasurers, and that is in cash management processes – checking balances and exposures, authorising trades or confirming payments and receiving updates for example.
Treasury resistance
Diamond notes that although many system providers have already created mobile versions of what they do, there has been “some reluctance” within treasury to adopt. Part of the reason, he believes, centres on the “very much office-based” sensibility of many treasury operations; it’s all about history and habit. A major concern, he observes, “is in taking the cycle of treasury processes out of the office environment and in doing so stepping outside of the comfort zone”. A similar reluctance to “embrace the new” can be seen in the persistence of use amongst treasurers of the spreadsheet, even though newer, more efficient technologies may be available.
Perhaps the most commonly cited discomfort is security. “Corporate treasurers still have the perception that mobile technology is not secure, which is a concern consumers also hold,” says Singapore-based Amit Sharma, Director and Head of eCommerce and Channels, Asia Pacific for BAML. “Consumer behaviour drives corporate behaviour, as it is the same person whether they are using personal or corporate access. This perceived security concern is the biggest hindrance to uptake, and something that can be seen on a global basis.”
“The viewpoint is that, if you step outside the ring-fence of office security by using a mobile device, you may be compromising that security by offering more opportunity for criminals to hack into the system,” says Diamond. “The fact is that all electronic technologies are open to hacking as criminals become more sophisticated.” Banks invest vast sums to protect clients (and their reputations) against cyber criminals. The authentication and validation tools deployed on a trusted banking partner’s mobile channel will be as robust as that of its normal treasury offering, so even if your tablet computer gets into the wrong hands it should still be safe.
Barclays’ Managing Director and Head of eChannels, Jon Ashton, does not feel that identity and password security is sufficient to safeguard mobile for corporate clients. The bank’s corporate banking unit is focusing on providing information services first, with payments and payments approval to follow once it has the security operating on a mobile device to a level that can support key commercial needs like non-repudiation. “Barclays is very rigid around using smartcards and readers to protect transactions. We haven’t really found a way of doing that on mobile, so we recognise there is a slightly lower bar there when it came to security.”
For BAML’s Sharma, as consumers and corporates become more confident in the security of mobile devices, the advent of bigger screen sizes in tablet computers will mean that navigation will become easier and the whole user experience will change. “On-the-go treasurers are likely to embrace non-critical activities first, for example accessing current balances or removing a signatory if that employee resigns,” he says. “I don’t believe that treasurers want to bring their whole bank onto their mobile devices – no one would want to initiate mass payments via mobile – but they probably will want to make time-sensitive, critical payments.”
The providers’ problem
“The underlying principle is to what extent is the channel being used to achieve business goals and, more importantly, to what extent it simplifies the process,” notes Maitra. Aware of the reticence to adopt mobile solutions, the response from some banks and vendors, adds Taylor, has been to deliver the “logical on-the-move extension” of existing treasury services which means smartphone and tablet access to an existing cash management portal, rather than attempting to provide something new from scratch. Mobile treasury as it stands today is not, and never has been, a means of phasing out all other channels, he explains, but instead is a way of giving clients access to data “wherever they are and on a device they already have with them”.
However, Diamond takes a different stance, believing that the current lack of appetite has dissuaded many banks and technology vendors from venturing as fully into the mobile environment as they might like. As such, not all functions are available on mobile and so, he feels, the user experience can appear to be a pale imitation of the traditional office-based system. “We are in stalemate at the moment: there is not really the demand for the industry to go the whole way with this and make it the same experience treasurers have in the office; but, on the other side, until the treasurer sees all of the functionality to enable the true remote working experience few will take it on with any real enthusiasm. It is a Catch-22 situation.”
In terms of presentation, most banks accept that if they make their mobile offering a mirror image of what is on the desktop “it’s not going to work”, notes Barclays’ Ashton. This awareness applies to core technology vendors too. An adaptive approach has been used by TMS vendor IT2 which currently offers “fluid movement between desktops, tablets and phones”, with full functionality at hand, using an “automatic adaptive interface” which configures the view according to the device being used, rather than shoe-horning the same view into every format.
Now for something completely different
For Ashton, the big problem for banks has been that unless they can come up with something that treasurers can do on a mobile device that they might not be able to do on their desktop, “then there isn’t really a reason to use mobile”. Whilst many providers are merely replicating their desktop cash management services in the mobile environment, he fails to see the point, arguing that treasurers can and will use their desktop for this purpose.
“We have made a conscious decision to structure our mobile application very differently to our desktop environment,” he says. “When you look at how the iPad, for example, presents data it is very different to how you would present it on a desktop. For a start, we have to make it very simple so that the small screen can represent everything they want to see,” explains Ashton. “The amount of data you can put on a desktop is much greater than you could ever put on mobile.” The idea, he adds, is that users neither have to read nor enter a lot of data.
The key to success may be for treasurers to use mobile treasury as a channel in its own right. If it is seen in this light, different products will start to evolve, steering it away from mere desktop replication but retaining its position to complement the other treasury channels.
Currently, the structure of a treasury operation, the segregation of duties within the team and the actual mobility of the treasurer will dictate the usefulness or otherwise of mobile treasury, says BAML’s El Dimachki. Anyone engaged in intensive number crunching, for example, will not want to work on a tablet, for obvious practical reasons. But as mobile functionality and practicality improve and adoption rates rise (looking to Asia as the most likely leader in this space), it could naturally start to change treasury practices just as the PC and the internet changed how we work and how mobile devices are currently changing norms within the retail sector.
“There is a lot that corporate treasurers can expect from mobile solutions,” comments Maitra. Convergence of platforms and systems will give a single gateway to various applications that “obviate the need to access applications through different channels”. Mobile used as a security token will eliminate the need to carry physical tokens for electronic applications, “and faster, concise, customised analytics will truly aid the decision making process”.
Talk of mobile treasury is more than just background noise but it is yet to make a real impact. It may be necessary to ‘consumerise’ the mobile treasury experience – bringing the same level of service as consumer offerings, with instant access and frequent updates – before users feel at home with it. BAML’s Taylor sums up the essentials of the current approach well by stating that a solution should answer a specific treasury need without harbouring “distractions that detract from the usefulness of the device”. And, he adds, it should never be seen as a means of replacing an entire existing traditional platform. At least for now.
