Table of Contents
Executive Summary
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- The issues
- Mobile banking still not heavily used
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- Figure 1: Use of mobile and online banking, July 2015
- Disruption in the lending arena
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- Figure 2: Funding sources, July 2015
- The opportunities
- Increase attractiveness of mobile banking
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- Figure 3: Essential mobile banking services, by annual revenue, July 2015
- Alternative lending
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- Figure 4: Spending and loan plans, by generation, July 2015
- Women and business banking
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- Figure 5: Business account ownership, by gender, July 2014
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- Figure 6: Future source of financing, by gender and age, July 2014
- What it means
The Market – What You Need to Know
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- Small business is back
- Fastest growing segment of small business owners: minority women
- Minorities are buying more small businesses
- A strengthening economy is helping
Market Size
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- Number of small businesses
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- Figure 7: Number of firms with fewer than 100 employees, 2008-12
- Women – especially minority women – are greater percentage of self-employed
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- Figure 8: Percent of self-employed women, by race and Hispanic origin, 1993 vs. 2012
Market Segmentation
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- Small business buyers are increasingly diverse
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- Figure 9: Percentage of small business buyers, by race and Hispanic origin
Market Factors
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- Stronger economy
- Unemployment
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- Figure 10: US unemployment rate, Feb. 2008-Aug. 2015
- Minimum wage legislation
- The Affordable Care Act
- Changing demographics
Key Players – What You Need to Know
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- Small business owners are satisfied with their banks
- Minorities and women are at a disadvantage
What’s Working?
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- Small business customers increasingly satisfied with their bank
- Alternative lending for businesses
What’s Struggling?
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- Mobile banking still not used
- Minority and women small business owners more often denied credit
What’s Next?
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- Increase in and smarter use of social media
- Microbusiness
- Alternative lenders will fuel the fire
- Kabbage
- OnDeck
- LendingClub
The Consumer – What You Need to Know
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- Most small businesses have only one owner
- Using incentives to capture business
- Mobile banking can be a source of revenue
- Alternative lenders have greatest growth potential
- Satisfaction with business banking relationships is high
Characteristics of Small Businesses
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- Most small businesses have only one owner
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- Figure 11: Business ownership, by gender, July 2015
- Most operate out of homes, not offices
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- Figure 12: Location of small business, July 2015
- Women are more likely to be sole proprietors
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- Figure 13: Number of paid employees, July 2015
- Age of business and revenues
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- Figure 14: Small business revenue, by age of business, July 2015
- Revenues of women-owned businesses are lower
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- Figure 15: Small business revenue, by gender, July 2015
- Mix of small businesses
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- Figure 16: Most popular small business industries, July 2015
- Age of business
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- Figure 17: Age of business, July 2015
- Women are starting more businesses than are men
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- Figure 18: Age of business, by gender and age, July 2015
Business Banking Services Used
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- What kind of accounts do they have?
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- Figure 19: Wells Fargo business checking incentive email, 2015
- Figure 20: Accounts owned, by gender, July 2015
- Larger small businesses are more likely to have business accounts
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- Figure 21: Accounts owned, by number of employees and annual revenue, July 2015
Factors in Choosing a Bank
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- How did they choose their business bank?
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- Figure 22: Factors in choosing business bank, July 2015
- Most important features for merchant services
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- Figure 23: Factors in choosing merchant services provider, July 2015
Mobile/Online Business Banking Usage
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- Online banking is much more popular than mobile banking
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- Figure 24: Usage of mobile and online banking, by gender, July 2015
- Both are more popular among younger people, younger businesses
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- Figure 25: Usage of mobile and online banking, by age of business, age of business owner, July 2015
- Even business owners who use electronic banking don’t use it much
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- Figure 26: Banking behavior, July 2015
- Value of mobile banking
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- Figure 27: Value of mobile banking services, by annual revenue, July 2015
Essential Banking Services
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- Different demands of mobile and online
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- Figure 28: Essential banking services, mobile vs. online banking, July 2015
Reasons for Not Using Online or Mobile Banking
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- Figure 29: Reasons for not using electronic banking, by channel, July 2015
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Business Banking Behavior
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- Getting businesses to switch banks
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- Figure 30: Reasons would switch banks, by number of employees, annual revenue, July 2015
- Opportunities for alternative lenders
- Businesses with higher revenue
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- Figure 31: Spending and financing plans, by annual revenue, July 2015
- New businesses
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- Figure 32: Spending and financing plans, by age of business, July 2015
- Few small businesses utilize mobile payment systems
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- Figure 33: Use of mobile payment systems, by number of employees, annual revenue, July 2015
- But most new small businesses believe they are the future
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- Figure 34: Importance of mobile payments to business future, by age of business, gender, July 2015
Business Funding Sources
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- Funding sources are changing
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- Figure 35: Past and future funding sources, July 2015
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- Figure 36: Centris Federal Credit Union Direct mail ad, 2015
- Credit unions should reach out to women
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- Figure 37: Plans for future financing, by gender, July 2015
Attitudes toward Business Banking
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- Importance of a business banker
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- Figure 38: Importance of bank branches and business bankers, by annual revenue, July 2015
- Majority is satisfied with their relationship with their bank
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- Figure 39: Satisfaction with business bank, by gender, annual revenue, July 2015
- Attitudes toward loans
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- Figure 40: Attitude toward getting a loan, by annual revenue, age of business, July 2015
Snapshot of Millennial-owned Small Businesses
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- Characteristics
- Business ownership
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- Figure 41: Small business ownership, by generation, July 2015
- Business location
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- Figure 42: Location of business, by generation, July 2015
- Number of paid employees
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- Figure 43: Number of paid employees, by generation, July 2015
- Annual revenues
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- Figure 44: Annual revenues, by generation, July 2015
- Company industry
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- Figure 45: Company industry, by generation, July 2015
- Age of business
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- Figure 46: Age of business, by generation, July 2015
- What small businesses want from their banks
- Type of account owned
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- Figure 47: Type of business accounts owned, by generation, July 2015
- Important features in a business bank
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- Figure 48: Most important features in a business bank, by generation, July 2015
- Mobile vs online banking
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- Figure 49: Mobile and/or online banking usage, by generation, July 2015
- Essential mobile and online banking services
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- Figure 50: Essential mobile banking services, by generation, July 2015
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- Figure 51: Essential online banking services, by generation, July 2015
- Attitudes toward switching and lending
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- Figure 52: Attitudes toward switching and lending, by generation, July 2015
- Online banking usage
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- Figure 53: Online banking usage, by generation, July 2015
- Mobile banking usage
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- Figure 54: Mobile banking usage, by generation, July 2015
- Use of online-only banks
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- Figure 55: Use of online only banks, by generation, July 2015
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- Figure 56: Capital One 360 business savings account email, 2015
- Sources of funding
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- Figure 57: Most popular sources of funding, by generation, July 2015
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- Figure 58: Planned future sources of funding, by generation, July 2015
- Attitudes toward and satisfaction of business banking
- Attitudes toward business banking
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- Figure 59: Attitudes toward business banking, by generation, July 2015
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- Figure 60: Attitudes toward business banking, by generation, July 2015
- Importance of mobile banking
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- Figure 61: Importance of mobile banking, by generation, July 2015
- Satisfaction with business bank
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- Figure 62: Satisfaction with business bank, by generation, July 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Consumer
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- Figure 63: Percentage of sole proprietorships owned by men vs. women, Feb. 2007-Mar. 2015
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