Small Business gets switched on-line
6 November 2006
Abbey Business predicts that banking online is the future for small businesses.
Ian Wilson, Managing Director of Abbey Business examines the current picture:
“Small Business owners and entrepreneurs invest a significant amount of time in their business. As a result, the normal, branch-led approach to consumer banking does not really apply. Online banking is the perfect solution to meet the needs of these business men and women who need their bank to come to them, rather than the other way around.
“The latest figures from the BBA show that 43 per cent of small businesses bank online. At Abbey 44 per cent of our small business customers already use our online facilities and we expect these numbers to grow over the next few years.
“Finaccord’s Small Business Metrics Survey recently rated Abbey top out of all business banks for consumer satisfaction with online banking.
“All business people have personal bank accounts and it is likely that trends in online business banking will be similar to those in personal online banking. According to the Future Foundation research company, the face of online banking has changed significantly in the past five years, with a sharp increase in the number of women banking online and the rise of the ‘Silver Surfer’. The stereotypical young, male, urban professional is no longer the master of the digital domain. Clearly, there is not a ‘typical’ small business owner and therefore the profile of online business banking users reflects that.
“As the take-up of the internet has progressed, the overall number of users has continued to increase, encompassing different types of people who previously avoided web use. Online banking has also seen an increase in the number and variety of users. Over the past five years women have been among the main converts to internet banking and the gender split is now almost equal.
“In a relatively short space of time, online banking has become the first choice for many people regardless of gender, age, socio-economic background or location. For some people, online services will never replace face-to-face contact, but many others like the convenience of the internet, with the ability to open accounts, move money and conduct transactions at any time from their work or home PC.
“As the internet continues to develop and expand, further development could well be driven by broader types of customer. We could see the following developments in the industry by 2010:
‘Mobile business banking’ services will start to achieve greater penetration. In 2010, a fifth of adults will have non-PC access to the internet[3], for example through mobile phones or wireless communications devices
Differences between social groups will persist. These differences will, however, decline after 2010 as new forms of internet access through new technologies become available
The age profile of internet users will continue to balance out but the older age groups will still lag behind
Two out of every five adults (38 per cent) will bank online by 2010. This is a huge increase when compared to the 1999 figure of 4 per cent and today’s figure of 20 per cent.
“The correlation between internet usage and online business banking is strong because the longer a person has used the internet, the more likely they are to use it to manage their day-to-day banking. The fundamental questions about internet access will have changed in four or five years’ time, and by then it will be less a question of ‘do they?’ or don’t they?’ bank online but more a question of ‘what do they do with it?’.”
