SMALL BUSINESS CHANNEL DYNAMICS (June 2016)

Blending High-Touch with High-Tech

Branches, ATMs, Online, and Mobile

Account Management, Services, and Sales

Key Finding from the Report:

Results from SYNERGISTICS 2013 study, Optimizing Small Business Channels, found that branches, PC online banking, and ATMs were the top channels being used by small businesses. To what degree has this picture changed?  Has usage of mobile and tablet banking grown among small businesses?

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Highlights of the Study

This study examines small business usage of various channels including the branch, ATMs, online banking, and mobile banking.  In addition, the response of small businesses to various innovations such as tablet banking, self-service options at the branch, and remote deposit is evaluated.

 

National Internet Survey – 600 small business owners/executives – 150 in the following sales volume categories – $50K-$99.9K, $100K-$499.9K, $500K-$999.9K, and $1M-$5M.  Industry categories include manufacturing, wholesale, retail, and services.

Key Dates

March 25, 2016 – Charter fee/Intro pricing ends.

March 25, 2016 – Final acceptance of comments on questionnaire.

June 2016 – Project Report available.

Strategic Questions

  • What patterns or changes in channel behavior among small business customers must providers identify and respond to in order to meet the needs of this important customer segment? Has usage of various channels increased, decreased, or remained unchanged in the past year?  How important are channel issues in selecting a financial provider?
  • What should be the position of the branch in channel strategies to serve the small business market? How frequently do small business owners or employees visit branches and what types of branch staff do they contact?  Can certain types of functional or staff improvements better optimize branches to meet the needs of small businesses?
  • What role do ATMs have as a channel used by small businesses to conduct financial activities or access accounts and services? Can the position of ATMs be enhanced with more advanced functions or services?
  • Where should primary emphasis be placed for future online channel strategies and tactics? Can PC-based online financial activities be improved or enhanced to better serve the needs of small business customers? Is usage of mobile devices – including both mobile phones and tablets – impacting the online financial behavior of small business customers?
  • How are other technological developments impacting channel behavior among small businesses? Is remote deposit capture (RDC) gravitating toward a PC-based or mobile activity?  Are mobile card readers – for both mobile phones and tablets – gaining traction in the small business market?  What types of mobile apps will best serve the small business market?
  • What channels should be prioritized for conveying marketing information to small business customers and acquiring new accounts? Does this vary by the type of financial product?  Does social media have a role in this process?
  • Does the usage or preference for certain channels among small businesses lend themselves to segmentation and targeting strategies?  What types of identifiers or variables – such as annual sales volume, industry segment, or number of employees – are most useful for this purpose?

Research Issues

  • Small businesses now have a myriad of channels they can use for their financial activities – from the branch and ATMs to PC, mobile and tablet banking.  Long been known as heavy branch users, small businesses’ usage of online banking and bill payment has progressively grown over the years.  Now, PC and mobile service offerings have expanded in response to this increasing need. To what extent has their usage of online banking expanded beyond balance inquiries and simple transactions to encompass more sophisticated account management, customer service, and account opening?  Have mobile banking and tablet banking become more than emergency channels for small businesses on-the-go?
  • In an effort to blend the personal touch with the convenience of online channels, some providers have implemented small business networks via their websites or have a presence on social media sites.  To what extent do small businesses tap into these resources? Although online and mobile channels have grown in popularity in the small business market, the branch continues to be a pivotal element in the channel mix.  How has small businesses’ usage of the branch changed in response to their increased usage of online and mobile channels?  What activities remain “branch-locked” for small business customers?
  • Another important channel for small businesses is the ATM or financial kiosk.  How are these self-service options being used by small businesses?  With all of these alternatives available, how important is the human or personal element in the channel mix? Are specific channels seen as primary modes for account management, customer service or sales? Understanding the dynamics of these various channels in the small business space will be key in optimizing channel strategies. [F243]