Ranking the Vendors of Small Business Banking: Segmenting the Client Base

April 17, 2003

Abstract

Boston, MA, USA April 17, 2003

Banks See Revenue Opportunity in Small Businesses

Celent forecasts that 21% of small businesses will be banking online by 2005. This dramatic growth will be the direct result of better technology, increased comfort with the Internet, and a greater interest in this segment by financial institutions.

Most banks have always considered the small business segment difficult and costly to reach. They were often placed in the "no-man痴 land" between retail and corporate arenas, where neither banking solution could sufficiently meet their individual needs. As a result, small businesses rarely banked online. Today, however, banks are beginning to recognize the revenue potential of this once ignored customer segment. As banks increasingly look to deploy solutions that target small businesses, fierce competition has arisen as both retail and corporate banking solution providers battle for market share of this untapped sector.

In a new report, , Celent Communications analyzes the solutions of 11 vendors and ranks them. The ranking is based on seven criteria: number of successful deployments, depth of features and functions, financial viability of the vendor, customization/flexibility, client support/customer service, technology platform and ease of use. Table 1 summarizes the results of the study.

Top Providers of Small Business Banking Solutions

"As banks continue to be faced with pressure to find new sources of revenue, small businesses provide a great deal of potential. Not only are they large in number (more than 25 million in the US), but they are also more loyal than large corporations and offer several cross selling opportunities to banks as they grow " said Christine Barry, wholesale banking analyst at Celent and author of the report.

Vendors included in this study are: BANKLINK, Corillian, Digital Insight, Financial Fusion, FundsXpress, Fundtech, Magnet, Metavante, Open Solutions, Politzer & HANEY, and S1. A is available online.

Rank

Solution Provider

1 Digital Insight
2 S1
3 Magnet
Source: Celent Communications

of Celent Communications' Wholesale Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA April 17, 2003

Ranking the Vendors of  Small Business Banking

Return to report Abstract

 

EXECUTIVE SUMMARY 3
MARKETPLACE 5
MAJOR TRENDS 8
VENDOR COMPETITIVE LANDSCAPE 13
VENDORS 16
  BANKLINK 17
  Corillian 19
  Digital Insight 22
  Financial Fusion 25
  FundsXpress 27
  Fundtech 29
  Magnet Communication 31
  Metavante 33
  Open Solutions Inc. (OSI) 36
  Politzer & HANEY 38
  S1 40
VENDOR COMPARISON 44
VENDOR RANKING 49
LOOKING AHEAD 53

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