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U.S. Middle-Market Companies: A Transitional Segment with a Lot of Upside Potential

U.S. Middle-Market Companies: A Transitional Segment with a Lot of Upside Potential

U.S. middle-market companies, expected to increase spending on financial services by 70% by 2013, are a lucrative business segment for banks.

Boston, MA, June 6, 2007 – A new report from Aite Group, LLC examines the banking needs and preferences of middle-market companies and identifies opportunities for banks to best serve the middle-market customer.

The report, based on a survey of 200 U.S. middle-market companies (defined as those businesses that generate between US$50 million and US$500 million in annual revenues), reveals that while middle-market companies make up a relatively small percentage of U.S. businesses, they are a very loyal and an increasingly lucrative segment for banks to service. In fact, by 2013, middle-market companies are expected to spend US$156 billion on financial services. This represents a 41% increase from the US$110 billion that is anticipated they will spend in 2007.

In an effort to improve operational efficiencies, middle-market companies are increasingly adopting electronic solutions, including electronic payments, automatic posting to internal accounting systems, and access to banking data online. Banks can easily meet these needs through offerings available to large businesses (with an annual revenue of over US$500 million), whereas small businesses (with an annual revenue of under US$50 million) often require the development of custom banking solutions.

"Loyalty and appreciation for the early lending support provided to a company during its start-up almost always carries through as it grows to be a middle-market sized company," says Nancy Atkinson, senior analyst at Aite Group. "Banks should find this a simple and highly lucrative group to retain with minimal effort."

This 42-page Impact Report contains 33 figures and tables. Clients of Aite Group's Wholesale Banking services can download the report.