Small Business Owners Slow to Adopt Online Banking
As the internet becomes increasingly indispensable for small business owners, fewer feel comfortable handling company finances online. A recent survey by Bank One Corp. found that only 6% of 300 small business owners with 10 or fewer employees banked through the internet, with 7% planning to start online banking in the next 12 months. However, industry experts believe that online banking will become more widespread in the next decade as small business owners become more accustomed to using automated teller machines and the convenience of online banking.
Key Takeaways:
- Only 6% of small business owners with 10 or fewer employees currently bank online, with 7% planning to start online banking in the next 12 months.
- Nearly half of all small businesses (49%) have online access, with 41% regularly using email to conduct business and 20% having their own websites.
- 16% of small businesses regularly use the internet to buy products, while 12% sell online.
- 60% of small business internet users reported an increase in profits by going online.
- The biggest draw of online banking for small businesses is convenience, particularly in tracking accounts, transferring funds, and paying bills without leaving the office.
- Small business owners identify trips to the bank as their most time-consuming task, with 18% citing it as a major issue.
- Banks have been criticized for failing to adequately address small business needs online, with many institutions charging varying fees for online services.
Statistics:
- 6% of small business owners with 10 or fewer employees bank online
- 7% of small business owners with 10 or fewer employees plan to start online banking in the next 12 months
- 49% of small businesses have online access
- 41% of small businesses regularly use email to conduct business
- 20% of small businesses have their own website
- 16% of small businesses regularly use the internet to buy products
- 12% of small businesses sell online
- 60% of small business internet users report an increase in profits by going online
- 18% of small business owners cite trips to the bank as their most time-consuming task
- Banks have undertaken over 1,000 internet initiatives, but many still fail to provide sufficient value to small business owners
Sources:
- Bank One Corp.
- Mainspring study: "The State of Online Banking and Internet Initiatives in the Banking Industry"
- Cambridge, Mass., advisory firm
- Jane Applegate, small business consulting firm owner
- Bill Schumer, national small business banking marketing manger for Bank One
- Various small business owners and entrepreneurs