Bankers are learning that some of the online services they offer to consumers are also appealing to small businesses — and vice versa.
“Banks have been kind of late to the game in terms of using the Internet to sell into the small-business market,” said Scott Linabarger, the senior vice president in charge of Web marketing for National City Corp. “There’s probably more attention, more desire, more publicity around the consumer than there is around the small business.”
The best approach to small businesses is to treat them like individuals, he said. “All small-business owners are inherently individual consumers, as well.”
For example, the Cleveland banking company lets people apply online for consumer loans and credit cards, but until Sept. 1 business loans, lines of credit, or credit cards required a paper application (which could be downloaded).
Several hundred applications for various types of business loans were being downloaded every month, though not all were submitted, and traffic patterns on National City’s Web site shows that businesses wanted online applications, Mr. Linabarger said.
Last month National City replaced its application system with one that lets customers apply for business products online. He said the response has been “phenomenal,” but he would not say how many business applications have been submitted online.
On the other hand, Huntington Bancshares Inc. of Columbus, Ohio, has long let business customers view things like same-day updates on transactions online, but in the last few years it has found that consumers also appreciate that level of detail.
In 2002 Huntington began providing consumers same-day updates on pending transactions, and they liked it, according to Ellen Johnson, the product vice president for online banking. The detailed information has let consumers act more like corporate cash managers by keeping tabs on their funds on a daily basis, she said.
“The sophistication level of the consumer is starting to grow, and they are starting to become cash-position managers in their households,” she said.
Consumers also monitor their accounts for suspicious transactions, in much the same way business owners do, Ms. Johnson said. “They used to call us for this type of information. Now they get it online.”
However, Mr. Linabarger said some consumer functions should not be incorporated into business banking.
Many consumers link their accounts to get a consolidated view online, but linking business and personal accounts can be a bad idea, even for owners of very small businesses, whose corporate and personal finances are closely tied together, he said.
That’s because business accounts are often accessible to coworkers, and people usually do not want their colleagues or employees to have access to details about their personal accounts, he said.
Chris Musto, a vice president for research at Watchfire GomezPro in Waltham, Mass., said some banks offer a combined view of business and personal accounts, but it is appropriate only for owners of businesses with less than $500,000 of annual revenue.
“Their primary consumer bank is their primary business bank, so they may want to be able to see everything together,” he said.
He agreed that small businesses should be treated like consumers, and he said banks should make business banking Web sites similar to their consumer sites. “That actually will suit a lot of $500,000 businesses just fine. They might be confused if the interface is different.”
Banks work from an assumption that anyone using a business banking Web site is a financial professional, but understanding finance is not the same as understanding online banking, Mr. Musto said. “I can know a lot about finance, [but] I can be utterly confused by the way you chose to set up a financial task.”
Alenka Grealish, who manages the banking group at the market research firm Celent Communications LLC, that banks pay far more attention to consumer interactions with online banking sites than they do to business interactions.
There is less observation of “ the small-business side,” she said, in part because business customers often interact with branch employees instead of a Web site.
Extensive online research and marketing have helped banks refine their consumer products and services, and they should do the same for business banking, Ms. Grealish said. For example, banks have heavily promoted online bill-payment to consumers, but not to businesses, even though the service has obvious benefits to small businesses, she said.
