Small businesses and mid-sized companies are putting less faith in online banking channels and are instead opting for the "human touch," according to new research from Greenwich Associates.
In the years before the onset of the global credit crisis, companies began relying on online banking platforms to a never-before-seen extent, according to Greenwich Associates, which polled 508 companies for the report. By December 2009, both small businesses and mid-sized companies ranked their banks' Internet platforms as having equal or greater importance than branch personnel in their interactions with their banks. However, companies in both segments now, by a wide margin, rank their relationship managers as their most important banking channel.
From late 2009 to July 2011, the number of small businesses citing the Internet platform as the single most important point of interaction with their bank declined to 18 percent from 24 percent and the share of mid-sized companies naming the Internet as their most important banking channel dropped to 21 percent from 25 percent. Meanwhile, the share of small businesses naming their relationship manager as their most important point of contact jumped to 53 percent from 48 percent; among mid-sized companies that share increased to 71 percent in July 2011 from 60 percent in December 2009.
However, the Internet remains the most frequently used bank channel overall by U.S. businesses. Among small businesses and mid-sized companies, the Internet is the channel of choice for activities including investigating the status of unpaid checks, initiating payments, requesting a copy of a statement or viewing balance reports, issuing a stop pay order, adding or deleting employees from payroll, and viewing paid check images, the firm said.
Meanwhile, mobile banking is lagging far behind, the report found. Only seven percent of small business respondents say mobile banking is very important, compared to 36 percent who say it is not important at all.