DALLAS - If the profitability of small business banking is their promised land, then most bankers are still wandering in the wilderness. That is what Gregory J. LaMothe, senior consultant with Dallas-based ActionSystems, has found in his work with banks that are trying to tap the potential of small business customers. While banks do a good job of connecting with those customers - either through a loan or a depository account - they often miss the profits that come with getting most of the relationship. In an interview, Mr. LaMothe said that banks that fail to cross-sell multiple products, from cash management to retirement plans, are missing opportunities in a segment that could generate an astonishing 5% to 8% return on assets. "There aren't many businesses left that a bank has that kind of profit potential with," said Mr. LaMothe, whose firm specializes in training and general consulting. He says banks must correct four structural problems that keep them from winning more of the relationship.: uncertainty over who is responsible for the relationship; failure to segment small businesses; a tendency to ask customers the wrong questions; and systems that reward bankers who build their own business lines at the expense of broader opportunity. "It's not their brains that get in the way," Mr. LaMothe says. "It's their bureaucracy."

Q.: Why is small business the customer du jour for banks?

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