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Financial Services and Small Businesses - US - October 2015

"The small business segment is changing rapidly, as an increasing percentage of small businesses are owned by women and minorities."

This report looks at the following areas:

  • Mobile banking still not heavily used
  • Disruption in the lending arena

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Mobile banking still not heavily used
            • Figure 1: Use of mobile and online banking, July 2015
          • Disruption in the lending arena
            • Figure 2: Funding sources, July 2015
          • The opportunities
            • Increase attractiveness of mobile banking
              • Figure 3: Essential mobile banking services, by annual revenue, July 2015
            • Alternative lending
              • Figure 4: Spending and loan plans, by generation, July 2015
            • Women and business banking
              • Figure 5: Business account ownership, by gender, July 2014
              • Figure 6: Future source of financing, by gender and age, July 2014
            • What it means
            • The Market – What You Need to Know

              • 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

                      • Number of small businesses
                        • Figure 7: Number of firms with fewer than 100 employees, 2008-12
                      • Women – especially minority women – are greater percentage of self-employed
                        • Figure 8: Percent of self-employed women, by race and Hispanic origin, 1993 vs. 2012
                    • Market Segmentation

                      • Small business buyers are increasingly diverse
                        • Figure 9: Percentage of small business buyers, by race and Hispanic origin
                    • Market Factors

                      • Stronger economy
                        • Unemployment
                          • 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

                              • Small business owners are satisfied with their banks
                                • Minorities and women are at a disadvantage
                                • What’s Working?

                                  • Small business customers increasingly satisfied with their bank
                                    • Alternative lending for businesses
                                    • What’s Struggling?

                                      • Mobile banking still not used
                                        • Minority and women small business owners more often denied credit
                                        • What’s Next?

                                          • 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

                                                      • 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

                                                                • Most small businesses have only one owner
                                                                  • Figure 11: Business ownership, by gender, July 2015
                                                                • Most operate out of homes, not offices
                                                                  • Figure 12: Location of small business, July 2015
                                                                • Women are more likely to be sole proprietors
                                                                  • Figure 13: Number of paid employees, July 2015
                                                                • Age of business and revenues
                                                                  • Figure 14: Small business revenue, by age of business, July 2015
                                                                • Revenues of women-owned businesses are lower
                                                                  • Figure 15: Small business revenue, by gender, July 2015
                                                                • Mix of small businesses
                                                                  • Figure 16: Most popular small business industries, July 2015
                                                                • Age of business
                                                                  • Figure 17: Age of business, July 2015
                                                                • Women are starting more businesses than are men
                                                                  • Figure 18: Age of business, by gender and age, July 2015
                                                              • Business Banking Services Used

                                                                • What kind of accounts do they have?
                                                                  • 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
                                                                  • Figure 21: Accounts owned, by number of employees and annual revenue, July 2015
                                                              • Factors in Choosing a Bank

                                                                • How did they choose their business bank?
                                                                  • Figure 22: Factors in choosing business bank, July 2015
                                                                • Most important features for merchant services
                                                                  • Figure 23: Factors in choosing merchant services provider, July 2015
                                                              • Mobile/Online Business Banking Usage

                                                                • Online banking is much more popular than mobile banking
                                                                  • Figure 24: Usage of mobile and online banking, by gender, July 2015
                                                                • Both are more popular among younger people, younger businesses
                                                                  • 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
                                                                  • Figure 26: Banking behavior, July 2015
                                                                • Value of mobile banking
                                                                  • Figure 27: Value of mobile banking services, by annual revenue, July 2015
                                                              • Essential Banking Services

                                                                • Different demands of mobile and online
                                                                  • Figure 28: Essential banking services, mobile vs. online banking, July 2015
                                                              • Reasons for Not Using Online or Mobile Banking

                                                                  • Figure 29: Reasons for not using electronic banking, by channel, July 2015
                                                              • Business Banking Behavior

                                                                • Getting businesses to switch banks
                                                                  • Figure 30: Reasons would switch banks, by number of employees, annual revenue, July 2015
                                                                • Opportunities for alternative lenders
                                                                  • Businesses with higher revenue
                                                                    • Figure 31: Spending and financing plans, by annual revenue, July 2015
                                                                  • New businesses
                                                                    • Figure 32: Spending and financing plans, by age of business, July 2015
                                                                  • Few small businesses utilize mobile payment systems
                                                                    • 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
                                                                    • Figure 34: Importance of mobile payments to business future, by age of business, gender, July 2015
                                                                • Business Funding Sources

                                                                  • Funding sources are changing
                                                                    • Figure 35: Past and future funding sources, July 2015
                                                                    • Figure 36: Centris Federal Credit Union Direct mail ad, 2015
                                                                  • Credit unions should reach out to women
                                                                    • Figure 37: Plans for future financing, by gender, July 2015
                                                                • Attitudes toward Business Banking

                                                                  • Importance of a business banker
                                                                    • Figure 38: Importance of bank branches and business bankers, by annual revenue, July 2015
                                                                  • Majority is satisfied with their relationship with their bank
                                                                    • Figure 39: Satisfaction with business bank, by gender, annual revenue, July 2015
                                                                  • Attitudes toward loans
                                                                    • Figure 40: Attitude toward getting a loan, by annual revenue, age of business, July 2015
                                                                • Snapshot of Millennial-owned Small Businesses

                                                                    • Characteristics
                                                                      • Business ownership
                                                                        • Figure 41: Small business ownership, by generation, July 2015
                                                                      • Business location
                                                                        • Figure 42: Location of business, by generation, July 2015
                                                                      • Number of paid employees
                                                                        • Figure 43: Number of paid employees, by generation, July 2015
                                                                      • Annual revenues
                                                                        • Figure 44: Annual revenues, by generation, July 2015
                                                                      • Company industry
                                                                        • Figure 45: Company industry, by generation, July 2015
                                                                      • Age of business
                                                                        • Figure 46: Age of business, by generation, July 2015
                                                                      • What small businesses want from their banks
                                                                        • Type of account owned
                                                                          • Figure 47: Type of business accounts owned, by generation, July 2015
                                                                        • Important features in a business bank
                                                                          • Figure 48: Most important features in a business bank, by generation, July 2015
                                                                        • Mobile vs online banking
                                                                          • Figure 49: Mobile and/or online banking usage, by generation, July 2015
                                                                        • Essential mobile and online banking services
                                                                          • Figure 50: Essential mobile banking services, by generation, July 2015
                                                                          • Figure 51: Essential online banking services, by generation, July 2015
                                                                        • Attitudes toward switching and lending
                                                                          • Figure 52: Attitudes toward switching and lending, by generation, July 2015
                                                                        • Online banking usage
                                                                          • Figure 53: Online banking usage, by generation, July 2015
                                                                        • Mobile banking usage
                                                                          • Figure 54: Mobile banking usage, by generation, July 2015
                                                                        • Use of online-only banks
                                                                          • Figure 55: Use of online only banks, by generation, July 2015
                                                                          • Figure 56: Capital One 360 business savings account email, 2015
                                                                        • Sources of funding
                                                                          • Figure 57: Most popular sources of funding, by generation, July 2015
                                                                          • Figure 58: Planned future sources of funding, by generation, July 2015
                                                                        • Attitudes toward and satisfaction of business banking
                                                                          • Attitudes toward business banking
                                                                            • Figure 59: Attitudes toward business banking, by generation, July 2015
                                                                            • Figure 60: Attitudes toward business banking, by generation, July 2015
                                                                          • Importance of mobile banking
                                                                            • Figure 61: Importance of mobile banking, by generation, July 2015
                                                                          • Satisfaction with business bank
                                                                            • Figure 62: Satisfaction with business bank, by generation, July 2015
                                                                        • Appendix – Data Sources and Abbreviations

                                                                          • Data sources
                                                                            • Sales data
                                                                              • Consumer survey data
                                                                                • Direct marketing creative
                                                                                  • Abbreviations and terms
                                                                                    • Abbreviations
                                                                                    • Appendix – The Consumer

                                                                                        • Figure 63: Percentage of sole proprietorships owned by men vs. women, Feb. 2007-Mar. 2015

                                                                                    Companies Covered

                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                    Financial Services and Small Businesses - US - October 2015

                                                                                    £3,277.28 (Excl.Tax)