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Inside Bank of America’s mobile-financing strategy for small businesses

No matter how easy or even pleasant technology makes everyday tasks, people will always want at least the option to call on human help. That’s the Bank of America perspective.

“They’re complementary, one doesn’t exclude the other,” said Sharon Miller, head of small business banking. “I go online and I’ll research and look at the information, but when it comes to getting the advice, looking for a loan, getting someone to tell me what I need to think about — I want to talk to someone… That’s what the basis of our company is built on. Our people make the difference.”

That’s coming from perhaps one of the most progressive of the major U.S. banks when it comes to digital strategy. It’s been one of the most aggressive in reducing its branch presence, it was among the first to upgrade its ATM fleet with new technology to giving customers greater choice of transaction type (like check cashing, making credit card payments, choosing their preferred denominations when withdrawing cash) and last year it was the first to deploy cardless ATM capability. On mobile it was ahead of the digital game with Touch ID, debit card toggling and fraud alerts to the app.

In another move on Wednesday, it upgraded the app to allow small business customers to apply for a loan or credit line directly from the app, making it a front runner in a market where most banks have yet to perfect their most basic mobile banking strategies for consumers, let alone those for corporate or small business customers, or even make in-branch or online banking functions just as easy to execute on mobile. As part of the app upgrade it’s also giving small business customers a loan product tool that helps them find the right loan for their needs, monthly loan payment calculator and the ability to connect with the bank’s small business specialists through online chat, phone or by scheduling an in-person appointment with a small business banker through their phone.

It’s really just another step toward the bank’s overall vision of making every banking experience the same across channels, according to Miller, by combining technology and customer service.

With 23 million active mobile users, B of A reported a 38 percent increase in sales over mobile over the last year. More than 1.3 million of them are small business clients and the bank says the number of small business customers using the mobile banking app has increased 14 percent in the last year.

“Our technology is there to help us keep up with everything happening in the world and the things consumers are demanding, but no matter how you slice it, there’s a reason we have 4,600 financial centers across the country and 2,000 people dedicated to small business across the country,” Miller said. “Thats the differentiator of us versus fintech or a community bank: we have size and scale to make it relevant, but we also operate in 87 different local markets with people that make local decisions and operate in those local counties.”

Listening to what takes place in those conversations, as well as feedback from online channels and customer surveys, has been “the key” to B of A’s digital success, Miller said when asked about how the bank came to identify the new feature as a need among its small business customers.

“We aren’t based on one product or one service, we start with the client and the difference between us and a fintech is our ability to have that local conversation,” she said. “We want to have the conversation that cant be replaced by just a product.”

She mentioned the forthcoming launch of its digital assistant erica later this year, which will provide a voice simulation to help clients with their banking. Still, not even erica can replace the value of a human banker for B of A. Banking is, after all, about people — and people are all different in their needs, preferences and capabilities.

Sometimes consumers need things individually that a small business owner doesn’t, and vice versa, Miller said, but all small business owners are also consumers, and she wants to make their banking experience seamless no matter what hat they’re wearing.

“Small business clients have different priorities. They could be starting a business, growing it, transitioning… All of those stages require different skill sets. They’re partnering with us to have that thoughtful discussion and get the right solution. Nothing just fits perfectly. Everyones different.”

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The biggest challenge to secure data access is time: Xero president

Xero is making it easier for small businesses to manage their finances, one bank partner at a time.

The accounting technology firm on Thursday entered its fourth bank partnership with Capital One, which built an application programming interface that lets Xero retrieve customer data from the bank without compromising, through scraping, customers’ sensitive bank login credentials — the more common way of accessing customer data. Xero has made similar deals with Wells Fargo, Silicon Valley Bank and City National Bank.

“For a business owner to have their own customized financial web and sit at the center of it, we have to have the relationships all across the ecosystem,” said Keri Gohman, president of Xero Americas. “All the banks, accounting partners, ecosystem partners so the business owner can see its full tech stack and how to make it work together.”

Gohman joined Xero less than a year ago from Capital One. Tearsheet caught up with her to discuss the problems data poses for small businesses and the challenges for banks and third parties trying to serve them.

This is Xero’s fourth bank partnership. Is there a theme here?
These bank integrations are happening more and more and it’s a recognition that customers want control of their financials. This is just another continued reinforcement of that trend and the reality that banks really want to get ahead of customer demand.

How has demand from small businesses changed in the last five years?
As consumers, we’re able to log onto Google Maps and have it pull ratings and reviews from Yelp, Uber so I can schedule a car, Waze so I can see traffic. I don’t really know I’m in all those things but I expect them all to work together. In much the same way, business owners are starting to expect that. They’re using the cloud, realizing the benefits of collaboration, they want things to work that same way.

Can you explain the data access issue for small businesses?
Getting access to lending is about your financial history and performance over time. It’s the lifeblood of what a business lives on, and relies on how they get underlying data and how that data all works together. Third party integration is always tough because the data isn’t always reliable, and the feed can get interrupted. Having this data feed directly with the bank creates a tighter integration.

So what’s the problem Xero is trying to solve with Capital One?
Sharing customer data with third parties safely, securely and in a way that puts the customer in control. There’s been a proliferation of great fintech solutions for small businesses, but they don’t all work together. And financial companies are recognizing they want the world to work together. Everything financially should work together so if I’m a business owner I’m asking what’s my bank, what are all the business applications I need? I need all my data to flow through to my P&L. I need to be able to manage all of my business in one place.

What’s the biggest challenge?
Banks have higher fiduciary standards. I don’t tell Google to start feeding Yelp, Waze or Uber, but consumers don’t expect their financial data to just be shared everywhere. If it’s sitting in another system and your bank allowed it to go there, who do you blame? Not the other company. All the banks are wrestling with the right way to do this but also give customers flexibility. We have to go one by one by one to all the financial institutions to set up these partnerships, and they also need to go one by one by one. The challenge is really time.

Where do we go from here?
Everything will become interconnected over time. What this unlocks over time is the economy. It has the ability to transform the data we have access to, the ability to make the systems work together really have the potential to unlock productivity in ways we can’t consider today.