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Boston, MA, September 24, 2008 – A new report from Aite Group, LLC focuses on the ways in which large U.S. banks currently define and serve small businesses, and delves into their ability to understand the needs of small businesses and effectively cross-sell to them. The report also examines some of the primary products used by small businesses, as well as the evolution of small-business demand for products and services such as sophisticated fraud prevention, alerts, online personal financial management tools (PFM-lite), health savings accounts, electronic invoicing capabilities, international capabilities and mobile banking over the past 24 months.
According to the report, there is a significant disconnect between large U.S. banks' perception of their understanding of the small-business space and their ability to effectively reach that space. While more than half of large U.S. banks admit that their small-business cross-selling abilities are nothing more than "average," 63% believe they have a much better understanding of small-business needs than they did three years ago. Additionally, when asked to rate their ability to understand the needs of small businesses, 81% of survey participants rated their institution's abilities as "very good" to "excellent." Meanwhile, when small businesses were asked that same question about their banks, only 40% stated that they are extremely satisfied with their primary institution's ability to understand their needs and recommend helpful products to them.
"Though large U.S. banks currently enjoy the biggest share of the small-business market, community banks are a growing threat in this space," says Christine Barry, research director with Aite Group and author of this report. "In order to maintain their leadership role, large banks need to effectively leverage their large branch networks, migrate small-business customers to more sophisticated business banking solutions, and gain a better grasp of small-business product price points. Their deep pockets should work to their advantage, enabling large banks to offer broader product portfolios and more sophisticated online capabilities, but they also need to improve cross-selling, customer service, and their understanding of small-business needs."
This 29-page Impact Report contains 25 figures. Clients of Aite Group's Wholesale Banking service can download the report by clicking on the icon to the right. 
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