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Industry News Banks failing to capitalize on small business segment 2010-06-25 While banks continue to evaluate their customer loyalty solutions for consumers, a post by Javelin Research blogger James Van Dyke says banks are failing to capitalize on the small business banking market and will soon begin losing customers. Van Dyke says that small business banking platforms are consistently missing a number of security features that many small business customers - including Javelin - are looking for, such as one-time password authentication, delegated-authority permission settings, banking alerts and a wide-reaching network of local branches. One-time password authentication gives a small business owner greater account security, which is paramount to all banking customers but even more critical for small businesses, Van Dyke says. A recent Javelin report found that small business owners were 1.5 times more likely to be the victims of identity theft. Another feature Van Dyke says many business banks do not offer is a set of account settings that only give finance managers controlled access to the company's accounts. He says that owners and executives do not want any employees to have "the keys to the kingdom," and would prefer a system that only allows accountants to set up payments pending higher approval. Van Dyke says that despite the introduction of banking alerts by many financial institutions, others still do not offer alerts to their small business customers. He says that alerts give executives and owners valuable real-time information about their accounts and help them understand exactly where their money is going. He adds that banks also cannot overlook the importance of local branches - even as more banking is moved to online and mobile platforms. While many companies are able to use remote checking deposits, others can't, and need to use a local branch to deposit checks. Financial institutions also have a strong risk of customer attrition when it comes to their small business customers. A recent report by the Aite Group found that an increasing number of small businesses - 23 percent - were disappointed with their banks. The number of customers that were extremely satisfied also showed a significant decline, down to just 27 percent of respondents. Deeper analysis of the data also found that customer attrition was not limited to those who were unhappy with their banking relationship. While 73 percent of those respondents said that they would consider looking for a new banking relationship, 27 percent of completely satisfied customers also said they might switch banks within the next two years. 
Make Every Staff Member a Marketing Ambassador Recent Customer Attrition Retention, and Loyalty News Two More Words on Client Retention
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