21 November 2017

Internet bank and mobile bank in small and medium business

For "Kommersant"

How is the number of legal entities - users of Internet banking and mobile banking services growing in Russia and in the world?

It is necessary to distinguish the requirements for internet banking and mobile applications from starting and experienced business. A starting business would not have fully-formed business processes and accordingly the usage of such IT solutions would be limited. On the other hand, experienced businesses would already know their needs and will be constantly improving and optimizing their business processes by using remote maintenance tools. According to the new ranking of The World Bank, Doing Business, Russia has risen to 35th place, narrowing the gap by 89 positions from 2011. This rating is an indicator of the ease of doing business and, as a result, increased growth of the small and medium businesses.

According to statistics, there has been an increase in enterprises by 634,000 in 2017 and more than 500,000 in 2016. Due to such growth, there has been demand for banking products by small and medium businesses. To maintain such demand, banks either increase the number of specialists or invest in technology that provides customer self-service. Statistics also show that the number of users of internet banking and mobile banking services grew by 7.2% in 2017 from 5.21% in 2016 in Russia. The average growth worldwide is 2.79% for 2017 and 1.43% for 2016.

On average, what is the percentage of bank customers using internet banking and mobile banking? Does it change?

The mobile banking application is a condensed version of the internet banking. In this regard, statistics show that only 28% of all users utilize the mobile banking application to check the account balance and view transactions or, read messages from the bank. Others prefer using the internet banking for daily transactions, online statements, confirming and modifying data, and more as it provides more features.

What changes have occurred in the market for banking applications for small businesses in Russia for the last year?

Significant expansion of functionality such as cost analysis of the company, online communication with the bank, robo-advisor for exchange of money, aggregators of information on all accounts, simplified interface and new security functions offering convenience and confidence in security to accelerate the process of doing business and improving consumer experience in the banking applications for small business in Russia.

Are bank customers more interested in security issues when using a mobile bank? Why?

Security is not a priority when choosing a bank. Small and medium businesses primarily choose the bank for its convenience and from the calculation of regular costs. Gradually, with the development of society and the change of paradigms, the focus will change to security and reliability of using remote access devices because it will be the only channel of communication with the bank.

In your opinion, will mobile banking remain a niche product in the coming year? Why?

The mobile bank for businesses will move towards increasing the functionality, and it is believed that the future of the entire banking industry is behind it. The first question that a person thinks of is, "how to make it easier, more convenient and minimize time on unnecessary tasks in order to get maximum results?”. From this trait, and the rapid development of global technologies, we predict that in about 5 years 70-75% of the market will exclusively use mobile devices for their company’s financial management.

If you look at the world today, how do you think mobile banking will fare for businesses in Russia in the coming years?

It is expected that within the next 5 years, full functionality of the internet bank will be placed in the palm of your hands via a mobile application.

Eldiyar Muratov President Castle Family Office Singapore