SMEs Opting for ‘Human Touch’ Over Internet Banking, Finds Research

Small and medium-sized enterprises (SMEs) are putting less faith in internet banking channels and are turning more often to bank relationship managers for service and advice, according to new research from Greenwich Associates.

In the years before the onset of the global credit crisis, companies began relying on internet banking platforms to a never-before-seen extent. By December 2009, both small businesses and mid-sized companies ranked their banks’ internet platforms as having equal or greater importance than branch personnel in their interactions with their banks. By a wide margin, companies in both segments now rank their relationship managers as their most important banking channel.

From late 2009 to July 2011, companies began putting more stock in the ‘human touch’. Over that period, the share of small businesses citing the internet platform as the single most important point of interaction with their bank declined to 18% from 24% and the share of mid-sized companies naming the internet as their most important banking channel dropped to 21% from 25%. Meanwhile, the share of small businesses naming their relationship manager as their most important point of contact increased to 53% from 48%; among mid-sized companies that share jumped to 71% in July 2011 from 60% in December 2009.

It is important to keep in mind, however, that the internet remains by far the most frequently used bank channel by US businesses. Seventy percent of small businesses and 84% of mid-sized companies say the internet is the means by which they most frequently interact with their banks. Among SMEs, the internet is the channel of choice for activities including investigating the status of unpaid cheques, initiating payments, requesting a copy of a statement or viewing balance reports, issuing a stop pay order, adding or deleting employees from payroll, and viewing paid cheque images.

“Before the start of the crisis, it was easy for companies to put their bank relationships on auto-pilot, with direct interactions initiated by companies mainly in connection with important events like loan applications, and with banks reaching out mainly in connection with new product sales,” said Greenwich Associates consultant Duncan Banfield. “Today, companies need help solving broader business problems, and our data shows that they have stepped up interactions with bank relationship managers as part of that effort.”


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