Serving Small Businesses in a Digital World

Top Trends in Small Business Online Banking
by Jacob Jegher, November 1, 2012
Industry Trends
North America

Abstract

Small businesses continue to fall through the cracks at financial institutions. A fresh suite of digital banking tools is required to provide a customized and relevant banking experience.

The small business online banking space has stagnated for far too long. The evolution of the Internet has provided users with rich and interactive experiences. Unfortunately, the banking industry has not kept pace, and customers have started to demand that their banks keep up with the times. In the report Serving Small Businesses in a Digital World, Celent examines and analyzes the top trends in small business online banking. Some of these are in full swing; some are nascent; and others are expected to impact the space within the next three to five years.

Next-generation small business online banking solutions are trickling out, but are nowhere near mainstream. Bits and pieces have already landed and will evolve, as banks segment their customers and embrace a multidevice environment. For the most part, financial institutions recognize their online shortcomings. The question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer as small businesses continue to fall through the cracks at banks, cost estimates for large consumer and business banking projects balloon, and nonbanks release innovative tools and solutions that attempt to solve business challenges.

“The small business digital banking space is fraught with confusion,” says Jacob Jegher, Senior Analyst with Celent’s Banking Group and author of the report. “Banks are still struggling to understand if their customers should be placed onto consumer online solutions, dedicated small business solutions, or even corporate cash management offerings. Small businesses require tailored service and an experience that takes into account their banking needs and comfort levels.”

 The 27-page report contains 10 figures and three tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Consolidation Confusion

3

 

Small Business–Retail or Business Banking Customers?

3

 

The Convergence of Online and Mobile Banking

4

 

One Solution to Rule Them All?

5

 

Vendor and Solution Consolidation

6

User Experience and Functionality Trends

8

 

Social Media Is Critical to Small Business Banking

8

 

The Tablet Will Act as a Catalyst to the Redesign of Small Business Online Banking

10

Fraud Prevention

13

 

Small Businesses Need a Trusted Fraud Prevention Partner and Advisor

13

 

It’s Time to Overhaul Multifactor Authentication

14

Money Movement

16

 

Small Businesses Require and Expect Easy to Use Payment Solutions

16

 

Startups Are Eating Banks’ Lunch

17

Conclusion

20

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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