Small Business Preferences and Needs Serve as Guide for Banks to More Effectively Expand and Serve This Market
CHICAGO, IL--(Marketwire - Mar 25, 2013) - Small businesses continue to be tied heavily to branches and place high value on personalized service, according to a new BAI Research study sponsored by ARGO. While technology has dramatically changed behaviors with retail consumers, small businesses continue to be quite traditional -- valuing proximity to their bank's branches, access to quick "local" decisions on credit, and help with problem resolution.
As banks continue to be pressured to consolidate branches because of challenging retail economics and steady drops in consumer transaction volume, the study suggests that branch cutbacks might have adverse effects with small businesses if not properly planned. According to the study, financial institutions that can provide superior service to small businesses at the branch can achieve a definitive market advantage -- particularly in terms of the share of wallet captured across core product sets.
"As the financial services industry seeks to attract, retain and grow their small business relationships, these findings are critical in shaping strategic priorities," says Debbie Bianucci, president and CEO of BAI. "This research tells us that banks have the opportunity to differentiate themselves in the market through the development of creative strategies around how the branch can be used more effectively and efficiently to service this important segment within the context of cost containment initiatives."
Among the study's other highlights:
As the preference of small businesses is to rely heavily on their branch and branch bankers, financial institutions with an integrated, branch-centric strategy can have a market advantage, at least for the next two to three years.
"Given the importance of the branch to these customer relationships," says Todd Robertson, senior vice president of ARGO, "banks that can provide superior service at the branch-level can attract and retain these customers. Although seemingly counterintuitive based on comparisons with retail consumers, this segment's strong attraction to the branch, personal service and paper checks, among other preferences, opens the door to grow existing customer relationships and become their primary financial institution. This can be done by facilitating the processing of large check deposits in the branch and by meeting all of the small business owner's needs, both for deposit and loans. With the right tools and training, frontline bankers can better engage small business owners and improve service by offering them the right product at the right time."
About the Research
The report, "Small Business Demand for Banking Services: Growth and Profitability Considerations," provides vital insights into how banks and other financial institutions can develop strategies to attract, retain and grow small business relationships. A comprehensive survey was conducted among more than 1,500 small businesses across the U.S. to obtain detailed intelligence on a range of banking activities, behaviors, attitudes, beliefs and preferences. Respondents were high-level employees from small businesses in the following annual revenue categories: $100,000 to $1 million, $1 million to $5 million, and $5 million to $10 million. Qualitative in-depth interviews were also used to support the findings.
About BAI
BAI is the financial services industry's partner for breakthrough information and intelligence needed to innovate and stay relevant in an evolving marketplace. For more than 85 years, BAI has focused on advancing the industry by offering unbiased education and research. BAI's offerings are as diverse as the industry, and include premier events such as BAI Retail Delivery Conference & Expo, groundbreaking research and performance metrics, professional learning and development programs, and in-depth editorial coverage through BAI Banking Strategies.
For more information, go to www.BAI.org. Follow us on Twitter @BAI_Info.
About ARGO
ARGO transforms business processes for banks, credit unions, lenders, and healthcare providers through software innovation. Founded in 1980, ARGO has grown into a recognized solutions partner of choice for eight of the nation's top financial institutions. More than half of the top 50 U.S. financial institutions trust ARGO solutions for their mission-critical operations. ARGO solutions process more than 55 million transactions each day in 35,000 financial centers nationwide.
Providing best-practices solutions and exceptional support, ARGO harnesses our technology into scalable solutions for teller payments, lending, and sales and service. ARGO Lending Solutions provide integrated prospecting, sales, loan origination, and customer management capabilities for consumer, indirect, small business, and commercial loans.
For more information, visit argodata.com.
Contact Information:
For more information, press only:
Jeannette Weiland
BAI
+ 312 683 2319
Colin Kemp
ARGO
+ 972 866 3681