Despite the wide availability of electronic banking products designed for small businesses, most of them still do their banking the old-fashioned way.

Only 19% of small-business owners bank by personal computer, according to the American Banker's 1997 Small-Business Banking Survey. Seventy-eight percent use branches.

The survey of 400 business owners showed that PCs are mainly used for routine tasks such as checking balances or moving funds between accounts. Less than a quarter of the PC banking users pay their bills or issue payrolls on-line. Only 8% make investments through PC banking services.

The problem is that banks are not promoting on-line services enough, said Charles Wendel, president of Financial Institutions Consulting of New York, which conducted the survey for American Banker.

"Banks are doing a miserable job of transitioning customers to electronic banking," Mr. Wendel said. "Bankers have not effectively explained its capabilities to their customers."

Many of the small-business owners in the survey said they use the telephone to conduct their banking, but less than 15% said it was their primary method of banking.

Nearly a quarter of the businesses with revenue between $5 million and $10 million have on-line connections to their banks. But just 10% of those with revenue between $500,000 and $1 million do.

Robert Patterson, general manager of Canadian Imperial Bank of Commerce's retail and small-business lending, said PC banking is very popular with its business customers.

But Mr. Patterson said small-business owners, particularly older ones, still come into branches because they believe bankers base decisions on personal knowledge of their businesses.

"They believe that if they don't go into the branch and get to know people, then they won't be able to get a special favor when they need one," he said.

Despite their dependence on branch visits, almost all entrepreneurs who try PC banking like it. Sixty-four percent of the business owners with a PC connection to their bank said it was very important. And nearly all with such connections and whose companies bring in over $1 million of revenue said they plan to use the PC channel more.

"It's easy for computer-literate people to use, but if they are not computer-literate, they have no interest," said Randy Haines, president of Compass Bancshares' lead bank in Birmingham, Ala. "It will grow."

Even for small-business owners who want to use PC banking, getting started is more complicated that just installing software on their computers.

Paul Edwards, an author of books on small-business, including "Working From Home," said he is interested in banking by computer. However, his bank-Bank of America-uses a proprietary on-line system that is difficult to link to Intuit Inc.'s Quickbooks, the software Mr. Edwards uses to track his business.

"I'd really like the convenience of PC banking, but I don't want to switch banks and I don't want to switch computer programs," Mr. Edwards said.

He said time-strapped businesspeople who prefer to do their banking in the evenings will switch banks rather than change accounting programs.

"You interface with your software every day, but you don't interface with your banker every day," Mr. Edwards said.

More than 30 banks, including Bank of Boston, First Union Corp., and KeyCorp, link PC banking programs to Intuit's small-business accounting software.

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