Boston, March 9, 2012 – A new report from Aite Group analyzes the changing characteristics of U.S. small businesses and provides a glimpse into the new expectations that banks must address to effectively serve this segment. The report, based primarily on the results of an August 2011 Aite Group survey of 291 U.S. small businesses that generate less than US$10 million in annual revenue, also discusses the types of small businesses that are likely to enter into a new banking relationship in the near future. The report will help banks understand where their products and services may be falling short as well as better position them to take advantage of future market opportunities.
U.S. banks and credit unions continue to increase their focus on the small-business customer segment. They view small businesses as not only large in number, but also in opportunity and revenue potential, as small businesses spend more than US$400 billion on financial products and services each year. Unfortunately, despite the increased focus on and implementation of several new bank initiatives, gaps continue to exist between bank and customer expectations, leaving small-business satisfaction levels lower than they should be. Additionally, almost one-fifth of small businesses are likely to enter into a new banking relationship over the next two years as needs evolve or go unmet.
“Small businesses are not a homogeneous group, and their needs and expectations continue to change, thus challenging banks attempting to establish product bundles and best practices for serving them,” says Christine Barry, research director with Aite Group and co-author of this report. “Financial institutions’ strategies and offerings for this segment must therefore be flexible and continuously evolving.”
This 32-page Impact Report contains 31 figures. Clients of Aite Group’s Wholesale Banking service can download the report.