Most banks are not providing digital account opening services for smaller businesses according to a study from Javelin Strategy & Research, which found that only six of the top 30 commercial banks in the US offer their business clients some form of online account opening application.
The report, Digital Account Opening in Small Business Banking, finds that most banks are severely lagging in small business digital account opening. But banks that do provide digital account opening services have a significant advantage. In Javelin's survey, those banks that do (just one-fifth of the top 30 US banks) hold 30 per cent of US small business deposits. Presumably the biggest banks are those that are more likely to be offering digital services such as digital account opening.
Javelin's Jacob Jegher said: “Small business account opening presents a tremendous opportunity for banks to demonstrate their omni-channel competence. Bankers should strive for a process that allows for seamless transition between channels, and uses the strengths of each channel to cross-sell and onboard customers into engagement-building digital services.”
The survey suggests that digital account opening is an opportunity for banks to demonstrate their omni-channel competence – but most are failing to embrace this. The study was based on data from 1,000 businesses with revenues between $100,000 and $10 million.
CTMfile take: The news on this research by Javelin is interesting and raises a few questions: are corporates put off by banks that don't offer a digital account opening service? Are bigger corporates and multinationals more likely (compared to business with revenues <$10m) to be offered digital bank account opening? What about KYC?
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