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Small-Business Strategies of the 30 Largest U.S. Banks: Closing the Gap Between Bank Offerings and Customer Needs

Small-Business Strategies of the 30 Largest U.S. Banks: Closing the Gap Between Bank Offerings and Customer Needs

Of large U.S. banks, 69% consider winning the business of the small-business customer segment “extremely” important to the overall success of their banks, while 82% expect this segment to use an average of more than four bank products by year-end 2009.

Boston, MA, August 6, 2007 – A new report from Aite Group, LLC explores the key small-business strategies and IT priorities of large U.S. banks. The report findings are based on a survey of 16 of the 30 largest U.S. banks. The report addresses issues such as how banks segment customers, which products are used most often by the small-business segment, which tools are in place to increase cross-selling, which technologies will be deployed, and how these technologies are being chosen.

The report, Small-Business Strategies of the 30 Largest U.S. Banks: Closing the Gap Between Bank Offerings and Customer Needs, analyzes the greater focus large U.S. banks are placing on small businesses, and the initiatives and technologies they are putting into place to better serve them, increasing the banks' market penetration. There are several factors leading to the increased attention to the small-business customer segment. These include their growing demand and need for more sophisticated bank products (thus increasing the revenue potential of this segment); their greater willingness to bank online (thereby making them less expensive to serve); and the development of new online tools and solutions (enabling banks to better serve, segment and understand specific needs to more effectively reach and serve them). Technologies such as online account opening and online targeted marketing capabilities are expected to play a significant role in helping these banks to identify opportunities and better cross-sell products. Aite Group forecasts that U.S. small businesses will spend approximately US$477 billion on financial products by 2010.

"The U.S. small-business customer segment remains a relatively untapped market. As banks ramp-up their efforts to better understand small businesses, the disconnect between bank offerings and customer needs is diminishing," says Christine Barry, research director at Aite Group and author of this report. "Going forward, those banks offering richer advisory services, more sophisticated online capabilities, and financial-management tools will find the greatest success in this market."

This 29-page Impact Report contains 26 figures and tables. Clients of Aite Group's Wholesale Banking services can download the report.