Bank of America upgrades its digital offerings for business clients

Bank of America has been churning out a steady stream of tools for businesses of all sizes over the last year.

Most are digital in nature, or incorporate technology to deflect fraud, speed up payments, or give fledgling companies a boost as they get off the ground. Relatively new features such as cash-flow forecasting reflect nascent trends in business banking.

Such features are also likely to rise in demand, as new business formations are booming. A record 5.4 million applications were filed to create new businesses in 2021, compared with 4.4 million in 2020 and 3.5 million the previous year. Those businesses already in existence found themselves adapting to changing consumer behaviors, such as the need to accept payments electronically instead of cashing checks.

Bank of America is a popular choice for small firms: 18% of businesses with revenues up to $10 million use Bank of America, according to data collected by Javelin Strategy & Research in 2021.

“The pandemic illustrated the expectations from clients that they need tools to remotely manage their businesses,” said Tom Durkin, global product head of CashPro in global transaction services at Bank of America.

“Corporate treasurers expect fast, intuitive, fully digital experiences,” said Tom Durkin, global product head of CashPro in global transaction services at Bank of America.

Some products focus on small-business owners specifically — and even those who haven’t started a company yet, but are planning to.

The “Start a Business” microsite, which debuted in March, is directed at this population. It provides articles about topics such as writing a business plan and financing a startup; guidance for structuring a business, including discounted access to Incfile, a company that helps new owners establish a legal business entity; and streamlined account opening, where the articles of incorporation go straight from Incfile to Bank of America.

“Aspiring entrepreneurs are looking for guidance on how to set up a business correctly and get core operating accounts up and going, and they are doing so in a digital fashion,” said Rob Pascal, chief experience officer for business at Bank of America.

Nearly 10,000 customers or prospects have visited the microsite since it launched in March.

Ian Benton, senior analyst for digital banking and payments at Javelin, points out that at least one fintech helps users form companies as well: Stripe, through its Stripe Atlas product. ZenBusiness is another example. And many banks have public education sections on their websites.

But, “I haven’t seen any banks go this far with it where they are helping someone start their business and file their paperwork,” he said.

Existing small-business customers can check their business credit scores for free online, through a Dun & Bradstreet service Bank of America made available last March. More recently, Bank of America announced a secured credit card with cash back rewards and an upcoming credit line for small-business owners.

Bank of America was ranked first in competitive intelligence firm Keynova Group’s 2021 Small Business Banking Scorecard, which assessed the digital offerings of ten of the largest U.S. banks that specialize in banking for small businesses.

Susan Foulds, managing director of Keynova, notes that Bank of America stands out for its strong account management and money movement capabilities, extensive educational resources and its online cash flow monitor.

“Other leading banks, such as PNC, Wells Fargo and Chase also offer many of these capabilities,” said Foulds. “However, Bank of America pulls it all together and also offers two unique offerings: linkage of third-party business apps for payroll, analytics or bookkeeping and aggregating data from external accounts, such as credit cards, for comprehensive spending reports and a business credit score rating.”

For corporate and commercial clients, Bank of America introduced CashPro Forecasting to its CashPro platform in late 2021. (CashPro provides tools companies can use to manage treasury needs.) There are only a few large banks that offer true forecasting. Bank of America’s feature, which it built with an unnamed vendor, uses artificial intelligence and machine learning to predict future cash positions across clients’ accounts at Bank of America and other institutions.

“It’s quite rare at this point to have cash flow analysis tools,” said Benton. “It’s tough to get right because businesses are so different from each other.”

Some products capitalize on needs that emerged during or were accentuated by the pandemic.

Recipients Select is for companies that frequently disburse payments to consumers, such as healthcare refunds or royalties, and want to give their customers choice beyond paper checks. The feature, launched in October 2021, provides companies with a custom portal that lets customers choose between Zelle, PayPal, real-time payments, cross-currency ACH and other payment types.

Account Validation, for corporate and public sector clients, addresses the increase of fraud during the pandemic. It lets users verify the status of an account and authenticate the account beneficiary before initiating an electronic payment, to guard against problems such as phishing schemes that convince payers to send payments to a different bank account, or misdirected payments. It was created in partnership with Early Warning and launched last October.

“It’s another check and balance ability to ensure beneficiary information is correct and validated before the payment leaves the bank,” said Durkin.

In December 2021, Bank of America added its ACH Positive Pay feature to its CashPro app, which would let clients review incoming transaction requests processed through ACH on the mobile app, rather than only the online version of CashPro—which is especially useful in hybrid work environments, when people are away from their desks. In March, the bank observed 3,000 decisions made via the mobile app, which is almost double month over month.

“Corporate treasurers expect fast, intuitive, fully digital experiences,” said Durkin.

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