Despite small-business customers’ demand for business online-banking functionalities, most banks serve the small-business segment via retail online platforms.

According to a new report from Aite Group, 90% of banks use their consumer platforms to service small business customers, while only 10% use a dedicated business-banking platform.

The small-business customer segment has become a significant focus area for U.S. financial institutions. While financial institutions recognize that the needs of small-business customers have become more sophisticated, they struggle to determine the best course of action for supporting these valuable customers. While consumer platforms sufficiently support some small businesses, most are left with unmet needs and a perception that banks do not understand their business requirements.

“While succeeding in the small-business space requires a multichannel strategy, a strong online strategy is critical,” says Christine Barry, research director with Aite Group and co-author of this report. “Any bank hoping to grow its penetration in the small-business space must work to migrate small businesses off consumer platforms and onto true business-banking ones.”

Based on an August 2011 Aite Group survey of 291 U.S. small businesses, the report discusses the types of online capabilities that small businesses are interested in, the capabilities they are willing to pay for, and gaps in banks’ current online offerings. The report also suggests value-added services that banks can provide to small businesses.

http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=883