May 07, 2002

Although small businesses aren't flocking to the Internet for banking transactions, the majority of them would like more services automated online.

That's the principal finding of a Celent Communications report on the use of Web banking by small businesses. Based on a survey conducted last fall, the report refutes the common perception that small businesses are adopting online financial services faster than their corporate counterparts. In fact, small businesses infrequently use the Internet for basic online transactions.

The findings suggest that the propensity of small businesses to use online services is high, but they are either unaware of what is available online or frustrated by the current lack of robust solutions.

The study detailed customer satisfaction levels by bank size, channel preferences for different functions, payment mechanisms most often used, and products and services owned by small businesses. It also examined the prospects for online and wireless adoption and one stop shopping opportunities.

Celent also queried small businesses about what value-added services their banks could add to enhance or expand their online experience. The study found that access to key metrics (e.g., list of top 10 accounts receivable, cash balance, etc.) is the most appealing value-added service. About 20 percent, or half of the businesses that showed an interest in this service, would be willing to pay for it.

Small businesses are looking for ways to streamline processes and save time; and due to their smaller scale operations, they are able to recognize the cost and benefits of a solution more quickly, according to Meredith Hickman-Outwater, co-author of the study.