The report, Small-Business Strategies of the 30 Largest US Banks: Closing the Gap Between Bank Offerings and Customer Needs, analyses the greater focus large US banks are placing on small businesses, and the initiatives and technologies they are putting into place to better serve them, increasing the banks’ market penetration.
There are several factors leading to the increased attention to the small-business customer segment. These include their growing demand and need for more sophisticated bank products (thus increasing the revenue potential of this segment); their greater willingness to bank online (thereby making them less expensive to serve); and the development of new online tools and solutions (enabling banks to better serve, segment and understand specific needs to more effectively reach and serve them).
Technologies such as online account opening and online targeted marketing capabilities are expected to play a significant role in helping these banks to identify opportunities and better cross-sell products.
Aite Group forecasts that US small businesses will spend some $477bn on financial products by 2010.
“The US small-business customer segment remains a relatively untapped market. As banks ramp-up their efforts to better understand small businesses, the disconnect between bank offerings and customer needs is diminishing,” says Christine Barry, research director at Aite Group.
“Going forward, those banks offering richer advisory services, more sophisticated online capabilities, and financial-management tools will find the greatest success in this market.”
MICROFINANCE INFORMATION EXCHANGE:
LATIN AMERICAN AND CARIBBEAN BENCHMARKS
The Peru-based Microfinance Information eXchange (MIX) has announced recently the release of its 2006 Latin America and Caribbean Microfinance Benchmarks. The benchmarks, based on sample data of a record 228 microfinance institutions in the Latin America/Caribbean region, represent the latest and most extensive microfinance institution performance information for the area.
“Benchmarks are critical to a healthy microfinance sector, providing a tool for assessment, review, and comparison, and ultimately providing a path for creating strong institutions. The participation of the microfinance institutions(MFIs) is integral to the strength of the industry in this region, and we greatly appreciate those institutions’ on-going collaboration with MIX,” stated Matthew Gehrke, regional manager for MIX.
The benchmarks are comprised of more than 60 key indicators, including financing structure, number of active borrowers, average loan balance per borrower and operational self-sufficiency, and for the first time will include information based on the type of credit products the microfinance institutions specialise in, such as microenterprise, consumer, commercial, and mortgage. The 228 MFIs include 17 bank institutions and 27 credit unions with assets of $166m and $11.4m respectively – total assets of the 228 MFIs is $209m.
MIX is a partnership between CGAP (the Consultative Group to Assist the Poor), the Citigroup Foundation, Deutsche Bank Americas Foundation, Open Society Institute, Rockdale Foundation, and others.
