Banks Boost Internet Banking Services Aimed At Smaller Businesses

G�mez Q2 2003 SOHO/Micro Banker Scorecard finds major banks focusing on bill pay and e-document delivery services that have been embraced by Web-savvy consumers and larger businesses

WALTHAM, MA, June 4, 2003 — Banks nationwide are aggressively boosting delivery of online services to smaller businesses by focusing on creature-feature upgrades such as bill pay and e-documents that have already hooked Web-savvy consumers and larger businesses, according to the Q2 2003 SOHO/Micro Banker Scorecard released today by G�mez, Inc., the leading provider of Internet Channel Effectiveness solutions.

The Q2 2003 SOHO/Micro Banker Scorecard, which evaluates Internet delivery of banking services to sub-$1 million revenue business customers, reveals a repeat winner (Bank of America), two significant fast movers (Wachovia and National City) and three new entrants (Washington Mutual, BB&T and Fifth Third Bank), among other trends. The 17-bank Scorecard constitutes G�mez’s second evaluation of SOHO/Micro online banking services since last October.

Overall, the outlook is a bright for the manager of a smaller business looking to gain convenience and control through Web banking, noted Chris Musto, the G�mez vice president of research who led the Scorecard initiative.

“With the rate of online document delivery among Scorecard banks on the rise, and substantial improvements to the design of offerings at National City, Wachovia and other banks, a competitive environment has emerged in small business banking,” Musto said. “This means significantly more choices for smaller business seeking to more cost effectively manage their finances online, particularly as they look to emulate larger businesses and savvier consumers who are using the Internet in ever greater numbers to pay bills, secure lines of credit and review transactions over time.”

Among the key trends surfaced by the Q2 2003 SOHO/Micro Banker:

  • Bank of America retains top status. Overall Scorecard winner Bank of America shored up a weak spot by introducing real-time synchronization between ATM activity and the Web banking transaction history, a feature now offered by more than three-quarters of Scorecard banks. Meanwhile, the bank continues to offer access within a single account management offering to both personal and small business accounts across deposits, credit cards, lines of credit and loans.
  • Wachovia and National City make inroads. Both banks jumped five places in Overall Score due to substantial improvements in their offerings. Wachovia’s improvement was due in part to the bank’s decision to move forward with First Union’s Online Business Banking Basic service, while making substantial improvements to the user experience, particularly in its bill pay area. National City, meanwhile, made numerous design enhancements that add to the security and convenience of the offering. For instance, National City now displays last login date and time information on the homepage for security-conscience users.
  • Three large banks enter the fray — one departs. Scorecard newcomers — Washington Mutual, BB&T and Fifth Third Bank — enter the ranking due primarily to changes in the way G�mez evaluates Internet services delivery to smaller businesses. The SOHO/Micro Banker methodology, for example, now uses asset size instead of commercial and industrial loan activity as minimum criteria. The strongest finisher among the three new entrants, Washington Mutual is an example of a bank offering that features tiered authority within the entry-level account management area. Meanwhile, PNC Bank’s exodus from the ranking reflects the other change in Scorecard methodology: the requirement that a bank offer Web bill pay within the account management area.

In fact, G�mez added two-dozen additional criteria to the Q2 2003 SOHO/Micro Banker Scorecard to track in greater granularity such essential attributes as account-based alerting, bill payment and synchronization between the Web and other channels. These criteria point to significant differentiators within small business banking, Musto said.

“For instance, bills payments that settle electronically routinely take less than five business days to be credited by the biller. But just 6 out of 17 Web banking offerings reviewed for this Scorecard both tell customers they can allow less than five business days for at least some bill payments and then back up that message by identifying which bill payments will be eligible for the shorter lead time before the customer submits the payment,” Musto pointed out.

Banks appearing on this Scorecard market a Web banking offering to small businesses that offer the ability to view checking balances, make transfers and pay bills all within one login. For banks maintaining two Web small business banking offerings, G�mez examined the offering targeted at SOHO and Micro customers. As a result, many of these banks have offerings targeted at larger small businesses or at middle-market customers that contain functionality not credited here.

About G�mez

G�mez serves companies that strategically depend on the effectiveness of their Internet channel to increase revenues and decrease expenses and provides the industry’s only comprehensive set of integrated solutions that help firms maximize the performance, functionality, and usability of their Internet channel.

G�mez Scorecards bi-annually measure the quality of e-commerce offerings, with a predominant focus on the Internet channel and a secondary focus on auxiliary channels and measures. Scorecards rank all firms in an industry that meet minimum standards of service (typically in terms of depth and breadth of product and national availability), and provide a snapshot of how industry players compare and contrast across user profiles and usage categories.

G�mez’s primary investors include: Dolphin Equity Partners of New York; Doughty Hanson Technology Ventures, the London-based venture capital fund of Doughty Hanson & Co; DB Capital Venture Partners, the venture capital arm of Deutsche Bank; and Harbinger/Aurora Funds of Research Triangle Park, NC.

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