Why do consumers get to have all the fun?
So much of bank innovation over the last several years has been designed to make the user experience better for retail customers, but innovation leaders at several large institutions say their technology focus is increasingly expanding upstream to business clients and they expect it to be one of the main areas of innovation in the coming year.
"We're spending a lot of time with customers to see how we can help them run their business better," said Dominic Venturo, chief innovation officer for Minneapolis-based U.S. Bancorp.
For instance, U.S. Bancorp last month launched a mobile payment app for its general aviation customers, which allows private and business pilots to pay for fueling and services directly from their phone.
"This was an example of listening to customer feedback and trying to create something that solves their pain points," he said. Venturo said MSA Pay, as the service is known, lets pilots tell servicers what they need prior to landing. The servicer sends the pilot an invoice and once that is approved, the app automatically emails a copy of the invoice to the pilot and to the pilot's finance department for final payment processing.
"This really cuts down on paperwork and time spent with the back office," Venturo said.
Companies are increasingly overburdened with paperwork and are looking for more efficient means of running their businesses. And they are now expecting banks to play a role in making the business more efficient and easier to manage through technology.
"A lot of [corporate clients] are beginning to say 'this is not acceptable'," when it comes to the solutions available to them, said Thomas Jankovich, a principal at Deloitte.
"Finance departments are being asked to do more with less," said Rick Burke, head of corporate products and services at Toronto-Dominion Bank. "They want to improve their working capital position and protect the assets of the company, and they're looking for tools to help be more efficient in doing that."
Banks will likely devote more resources to innovation on the corporate side going into 2016 and beyond, Jankovich said. Besides the need for efficiency, the generational shift from baby boomers to younger people is also pressuring banks to come up with easier-to-use apps and interfaces that mirror their experience individuals have with the bank.
"They are also consumers and retail customers in their personal lives, and they can't understand why as a wholesale customer they are at the bottom of the technology pile," he said. "The tipping point is about to occur."
Hubert "JP" Jolly, the global head of channel & enterprise services, treasury & trade solutions at Citigroup, echoed Jankovich in saying that the much of the push to make commercial products more consumer-like is generational.
"Especially, millennials do not want to go through webinars to figure out bank apps. They have to be so intuitive not to require training." Jolly said.
Citigroup's commercial innovation team partners with its consumer banking counterparts to design user interfaces that are intuitive and simple, Jolly said, including its CitiDirect BE Mobile, which launched in 2011, and the accompanying tablet app which came two years later.
While the tablet app was designed for executives – think about a CFO using the app to approve a wire while waiting for a flight – the next step in making the commercial products more consumer-like will be for those who spend their days in front of a computer.
"We are hearing from a lot of clients that they like the experience they have on the tablet more than our desktop-based online banking portal" Jolly said. "We are looking to make the portal as intuitive as the tablet."
The number of people interacting with the bank in various capacities on behalf of a company is one of the reasons why commercial technology is behind retail innovation. Business clients have more complex needs and their threshold for security is markedly different. But some banks are seeing those challenges as an opportunity to innovate around, rather than as an excuse to avoid it.
For instance, U.S. Bancorp earlier this year added "virtual cards" to its mobile corporate payments app, as a way to limit the number of physical cards it issues to employees.
"Issuing a card to every employee is a high burden, it's a lot to keep track of," Venturo said. "A virtual or on-demand solution can be much easier to manage."
The virtual cards are designed for employees who need to make a one-off work-related payment or who make purchases rarely enough that they don't need a physical plastic card. The virtual card generates a single-use, cardless account with a 16-digit number to make the payment.
Digital corporate payments can be more easily tracked and can be linked to an expense management system, eliminating the tediousness of expense reporting, Venturo said.
The proliferation of data is another reason why companies are demanding more from their banks, several bankers said.
"One of the things they are really hungry for now is analytics [around payment data]," Burke of TD Bank said. "They want to look at their payment behavior and be able to see the patterns behind it."
For that reason TD Bank has invested heavily in information services solutions for corporate customers, Burke said.
"This is an area of investment all of our commercial clients across size are asking for," he added.
There is a deluge of data and clients are asking their banks to help them digest it, said Sarah Biller, chief operating officer of innovation at State Street's Global Exchange.
That's why State Street is focused on things like machine learning and natural language processing to develop products for commercial clients that have the ease of retail products, she said.
"Yes!" Biller said emphatically. "The next wave of innovation is absolutely about bringing the customer experience to the enterprise clients."
Robert Barba contributed to this article