What is a defining difference between what a small business looked like in 2001 compared to how they operate today? Easy: they're online.
Statistics Canada reports that while the small business market has grown steadily in both total numbers of registered businesses and transactional volume, there has also been a notable increase in the small businesses that now have internet access (85%), own a website (36%) and purchase online (45%).
The numbers indicate a growing appetite to do business online, and in this arena the management of their financial responsibilities is no exception. Island Savings Credit Union, a Victoria, BC-based credit union, has experienced first-hand the rise of small business online banking since launching MemberDirect® Small Business Services in 2009.
"More and more of our members are going online to manage their small business accounts. Sixty-five percent of our small business members use online banking and this continues to grow", says David Arrowsmith, Senior Manager, Business Solutions at Island Savings Credit Union.
Over the past four years, Island Savings' Small Business team has grown from six to 20 employees as it has shifted small business from "the side of the desk" to being an integral part of its retail strategy. "We have many local businesses wanting to deal with an island-based institution, but our standard business services are too complex for most one-to-five people companies", says Arrowsmith. "Our MemberDirect Small Business service, which we call Small Business Online Banking, or SBOB for short, is more flexible, reduces the complexity and offers features that significantly improve the way small businesses manage their day-to-day accounts."
Many Island Savings' small business members were managing up to 20 separate accounts, often requiring dual signatures for transactions. Typically, members needed two people to attend the branch at the same time or pre-sign blank cheques, and there was always the challenge of tracking down the signers and faxing manual transfer receipts.
When small business members converted to MemberDirect Small Business they were able to delegate tasks, consolidate accounts, do their transactions online and complete dual signatures anywhere, anytime. It improved their ability to manage funds and pay their bills on time. "The dual signatures, multiple-user support and account consolidation features gave our members back their time so they could focus on their core business", says Arrowsmith.
Offering the right mix of features to meet the needs of small business customers requires careful consideration, particularly when all features are not implemented simultaneously. MemberDirect Small Business allows financial institutions to select one feature, or any combination of features, based on the needs of their small business customers and the cost of support.
MemberDirect Small Business Services is specifically designed with features to attract, cross-sell and up-sell to this savvy, entrepreneurial market sector. "Now that Island Savings offers a flexible and secure online service for small business, we successfully bid on accounts that we were previously uncompetitive on", Arrowsmith points out. "We have a genuine competitive advantage in that the banks don't offer the complete feature-set available from MemberDirect Small Business Services". And this competitive advantage is translating into real bottom line increases. "Over the last two years we've seen strong growth as a result of offering improved service to small business. Deposits are up 19.8%, lending up 10.8%, and memberships are up 14%", says Arrowsmith.
Small business customers are not only online, but mobile as well. Central 1 was the first to launch mobile functionality to small business users in Canada with MemberDirect Mobile Services for the Mobile Web which allows small business customers to approve transactions from their mobile device anywhere, any time. It's specifically designed for use on smartphones, including the iPhone®, BlackBerry™ and Android™ platforms.
Margarita Lurye, Product Manager, Business Online Banking at Central 1 talks to the growing acceptance by small business customers for mobile platforms. "The market is familiar with consumer-side tools, and looks for similar tool sets for the small business market segment. Offering an online, user-friendly experience is really table-stakes to attracting new business", says Lurye.
Central 1's launch of a mobile banking app for iPhone, anticipated for release early in the New Year, will provide credit unions with another bow in their mobile quiver. "We predict strong interest in the mobile app from our small business market as they continue to seek operational efficiencies in ways that fit the day-to-day operations of their business", says Lurye.
Learn more about MemberDirect Small Business.
Central 1 Technology and Payment Services