Boston, MA, May 27, 2008 – A new report from Aite Group, LLC evaluates the online behaviors of small businesses and identifies the mistakes banks make when serving that particular customer segment. The report provides banks with a list of the key products and services small businesses would be willing to use if they were offered by their primary financial institutions, which would enable banks to deepen their relationships with this group.
While banks have placed a greater emphasis on serving the highly sought-after small-business customer in recent years, more can be done to appeal to this segment. By analyzing the results of a November 2007 Aite Group survey of 303 U.S. small businesses (defined as those businesses generating less than US$10 million in annual revenues), Aite Group has identified three common mistakes banks make when serving the small-business customer segment. These mistakes limit banks' potential for success with this segment, and include underestimating the willingness of small businesses to use more advanced online capabilities; failing to provide the right tools for small businesses to manage their cash; and offering only limited small-business product portfolios.
"Small-business customers expect their bank to become their trusted advisor," says Christine Barry, research director with Aite Group and author of this report. "Success in attracting and retaining the small-business customer requires that banks strive to exceed the expectations of small businesses, which increasingly expect financial institutions to know their specific needs and recommend products based on those needs. In addition to keeping an eye on more traditional bank competitors, banks must also keep an eye on non-bank players, which have filled many of the gaps banks have left open in recent years."
This 20-page Impact Note contains 20 figures. Clients of Aite Group's Wholesale Banking service can download the report.