US Small Business Banking Vendors 2004: Strategies for Survival

November 3, 2004

Abstract

New York, NY, USA November 3, 2004

Banks Increase Their Focus on Small Businesses

In an effort to better serve small business customers, Celent estimates that 30 percent of banks have either created separate business units or restructured the servicing of this customer base from retail to corporate banking.

Celent’s latest report, , examines banks’ efforts to generate additional revenues by focusing greater attention on the once-ignored and relatively untapped small business customer segment. It analyzes bank restructuring, banks’ more targeted marketing efforts, and the deployment of browser-based banking solutions designed specifically with the needs of small businesses in mind. The solutions as well as the technology providers are analyzed and ranked according to seven major criteria: number of successful deployments/experience in the industry, depth of solution features, financial viability of the vendor, solution customization/flexibility, level of client support provided, and solution ease of use.

While most small businesses still consider the branch their preferred banking channel, increased efforts from banks and improved solutions have led to a rise in online banking adoption by this group, from 3.3 percent in 2001 to 16 percent today. "Even the largest banks are recognizing the revenue potential of this customer segment, which spends approximately US$270 billion annually on financial services products," states Christine Barry, wholesale banking analyst and author of the report. "There is an obvious effort by these banks to win back the segment’s loyalty and reduce attrition to smaller banks perceived to provide superior customer service—a factor extremely important to small businesses," adds Barry.

New small business banking solutions are designed to meet the specific needs of these businesses as well as their often-limited budgets. Over the last year, great emphasis has been placed on solution usability. Also important has been depth of functionality and the ability to create targeted packages, allowing a bank to offer more sophisticated capabilities as a customer’s needs grow. Celent has ranked the following vendors as the top small business banking technology providers:

Ranking Vendor
1 S1
2 Digital Insight
3 Politzer & Haney
Source: Celent Communications

This 57-page report contains five figures and 24 tables. A table of contents is available online.

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 subsidiary 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

 

New York, NY, USA November 3, 2004

Small Business Vendors 2004

Return to report Abstract

 

EXECUTIVE SUMMARY 3
MARKETPLACE 5
TECHNOLOGY TRENDS 10
VENDOR LANDSCAPE 14
VENDOR STRATEGIES 16
VENDOR PROFILES 19
  Banklink 20
  Corillian 22
  Digital Insight 25
  Financial Fusion 27
  FundsXpress 29
  FUNDtech 31
  Information Technology Inc. 34
  Metavante 35
  Open Solutions Inc. 37
  Politzer & Haney 40
  S1 42
VENDOR COMPARISONS 46
VENDOR RANKINGS 51
FINAL THOUGHTS 54
OBJECTIVITY & METHODOLOGY 56

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