Abstract
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
This first report from Mercator Advisory Group' s Corporate Banking Practice
looks at banks using retail strategies to deliver business banking products to
corporate customers. The report examines the touch points within corporate
banking being used to extend bank markets.
With lessons learned from retail banking, corporate banking product management
is repackaging products and services for corporate customers' and their
employees, such as direct deposit and convenient online banking, effectively
opening up a whole new market. This report looks at WorkPlace Banking, which
delivers banking services to employees at their job site. These new services
help employers turn payroll and banking services into value added employee
benefits. Banks and corporate customers are working together to customize
additional value added personal banking programs to attract and retain
employees, features such as reduced rates and waived fees. Services include
free checking, online banking, health savings accounts and investment
guidance. There are rewards programs where banks issue points on debit card
dollars to purchase discounts at major retail chains.
Banking is changing and corporate banking is most affected. Large complex
corporate financing requires more regulatory documentation. Some banks realize
the hidden potential of small and medium enterprise businesses (SME) and they
are developing new strategies to capture market share. By broadening their
view corporate bankers can offer more complex services to the growing SME
segment that want and need them. This report gives the reader a high level
overview of small business financial services potential. Banks were the
dominant financial services provider to small business through their branch
networks. New competition from nonbanks using state-of-the-art web technology
has captured the lion share of this marketplace. The next Mercator Advisory
Group report on Small Business banking looks at SME acquisition strategies to
attract and retain their small business customers.
There is a financial services market revolution happening and it' s imperative
for banks to keep up. Intense competition from other banks and nonbanks are
driving innovation. Banks need to examine their products and services to make
sure they are aligned with their market strategies. Are their products
competitive and offer value. Business customers are changing; they are web
savvy and looking for best of breed solutions. Banks need to change to keep
up. Customers are attracted to solutions that meets their needs and there are
many choices to select from.
Sarsha Adrian, Senior Research Analyst in Mercator Advisory Group' s Corporate
Banking practice and author of this report, comments, "This is the first of
a series of reports that will put corporate banking and small business banking
in perspective. Corporate banking is changing. Corporate banking product
managers need to recognize the huge potential selling through existing
relationships. Bank corporate relationship can be extended to reach new
business markets and banks can play a strategic role in their business
customers' future".
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