Small businesses have not adopted the use of mobile banking to aid them in their daily business operations, and their perception of this tech-savvy option remains largely negative.

Very few small businesses are fans of the mobile options offered by their banks, with 69% who do not have a positive perception of them and 34% who have never used mobile banking although their financial institution provides the option, according to a survey conducted by RateWatch, a Fort Atkinson, Wis.-based premier banking data and analytics service owned by TheStreet, Inc., and Simon-Kucher & Partners, a strategy and marketing consulting firm. Conducted in the third quarter of 2016, the survey queried 215 U.S.-based small businesses that generated a maximum of $4.99 million in annual revenue in over 20 major industries, including retail trade, construction, finance, insurance, professional, scientific and technical services.

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"The small business customer is a huge untapped market for financial institutions," said Jamie Zussman, a business development associate for RateWatch. "This report provides data and a framework for how financial institutions can deepen their understanding of this segment and create compelling packages and services for them."

The third annual survey revealed that small businesses prefer not to use mobile banking, which emerges as a roadblock for financial institutions that are developing methods to generate additional revenue and monetize their digital offerings.

"We need a systematic and structured approach to designing, pricing and selling mobile banking solutions," said David Chung, a director at Simon-Kucher & Partners. "When these steps are managed separately, we find suboptimal products that fail to meet revenue and profit goals and fall short of addressing customer needs."

The small business customers surveyed said their satisfaction with mobile banking is correlated directly with the rate at which digital innovations or new digital features are introduced.

The options offered through mobile banking are focused more on consumers rather than small businesses, said Jeff Golding, chief growth officer at IRH Capital, a Northbrook, Ill.-based financial company. Depositing checks is faster and more efficient by going to a bank branch than taking photos of them individually and manually entering in the amount. The current software does not account for adjusting mistakes made by the small business customer.

"If I have dozens of checks, it is easier to drop it off at the teller, who will verify the amounts," he said.

The technology also does not focus on vital tasks such as reconciling invoices and bank statements, so small businesses rely on using their desktops or laptops instead.

"Mobile banking is not convenient or efficient for business use and there are other systems in place such as point-of-sale software," Golding said. "I rely much more on my accounting software than my bank software and look at it more frequently."

Companies which have hundreds of transactions daily will not use their smartphones for transactions or to check updates, because it is not convenient with images that load too slowly and there's not always secure WiFi available.

"It is not a practical use and I just don't see the need," Golding said. "Banking is not a real-time transaction, and I would never use mobile banking unless I wanted to review the balance."

There is a gap between what small business owners are seeking from their banking apps and what financial institutions are offering, according to the survey.

"In order to take advantage of this largely untapped market potential, financial institutions need to develop systematic approaches to designing, pricing and selling their offering," the survey said. "We commonly observe that these steps are managed separately and without consideration for one another, which results not only in suboptimal products, but also in prices that either do not meet the customer's needs or do not reflect the customer's willingness to pay."

The RateWatch survey also revealed that online banking users have declined. In 2015, only 9% of survey respondents did not use online banking frequently or at all, but in 2016, the number has now grown to 20%.

"This trend may indicate that banks either do not offer the products that meet the needs of their small business customers or that they do not have the right approach to communicating and selling their offerings," the report said.

A similar trend for mobile banking had also emerged. In 2015, 28% of the survey respondents indicated that even though their financial institution provides mobile banking, they have never used it. This number has increased to 34% in 2016.

"While the overall take up of mobile banking has decreased from 60% in 2015 to 53% in 2016, the percentage of higher frequency users has increased," the survey said. "This trend might indicate that mobile products are helpful when a customer decides to use them, but potentially inadequately marketed and sold."

An executive summary of the report is available online.

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