Alec Beckett and his partners at NAIL, a Providence ad agency, spend their days meeting with clients, taking calls and working on projects. They come up for air only after-hours, and that’s often their first chance to check on their finances.
Beckett often logs on to the Sovereign Bank Web site from home, on evenings and weekends, just to see what checks have cleared, whether the payroll has gone through.
“I do online banking personally, and it changes your life,” Beckett said. It’s especially convenient for NAIL, he said, “because bankers’ hours are not our hours. Banks have made an effort to open up, but there’s still that 10-to-3 mentality. We do not function from 10 to 3.”
Young and tech-savvy, the NAIL partners have been banking online for a couple of years. But now, many more small-business owners are joining the fray, realizing that for people like them in particular, the benefits can be enormous.
“Small businesses are probably the most rapidly adopting group of online services, because it’s so convenient for them,” said James V. DeRentis, executive vice president of retail banking and marketing at Bank Rhode Island.
“Small businesses are the most pressed for time of all the customer segments,” DeRentis added. “This is flexible, it’s convenient, it’s easy and it allows the customers to access the bank on their terms, rather than conform to certain hours. … It’s just a win-win.”
All five of the largest banks in Rhode Island, including BankRI, offer basic online banking services free to business customers – though each bank’s Web site, technological strength and range of offerings are different.
Not surprisingly, Bank of America, deemed a national leader in online banking (comScore ranked it No. 1 last year, and Fleet, No. 3), has the most elaborate package, with up-to-the-minute account information, free transfers between Bank of America accounts, online bill payments – including many that can be done by electronic transfers – and automated alerts so business owners can know, for example, if a check has cleared or if their balance has dropped under $1,000.
For an extra $15 a month, Bank of America will add QuickBooks interoperability, multi-user account access, multiple business entity views with a single sign-in and external account aggregation. Employee direct deposit can be added for $10 more for the first 20 payments, and $2 for every five additional payments.
The Bank of America small-business site has about 750,000 active users, according to bank spokeswoman Christina Beyer. With a range of free business planning tools and other resources, it’s also been ranked No. 1 for three years by Gomez Inc., which scores online financial services.
Yet the other banks aren’t far behind. Citizens Bank, which just upgraded its system last month, offers many of the same services, and some new features such as the ability to add detailed invoice information when paying a bill online. Users can also view images of canceled checks online, front and back (Bank of America also offers this), which Peter Gordon, senior vice president and director of Citizens Direct Bank, said has been an “extremely popular” feature.
At the Washington Trust Company, the basic business online banking service has all the features of personal accounts, plus extras such as the ability to set up additional users, each with a different level of authority. But much of the bank’s energy has been focused on its premium services, sold under the umbrella of “cash management.”
Those customers, about 12 percent of business online banking users, can do direct deposit, wire transfers, cash concentration and send in batches of debits to be taken from multiple accounts – say, a club’s membership dues.
Lisia Quinlivan, vice president of e-commerce at Washington Trust, said the bank focused on developing those services because it was particularly well-equipped to do that, but it continues to improve its basic product as well.
By the end of May, for example, Washington Trust hopes to have real-time account information, Quinlivan said – “I think that’s a key, especially for businesses.” Also in the works, she said, are check imaging and account reconciliation, among others. But even now, business online banking enrollment is growing rapidly. It rose 50 percent from 2003 to 2004, Quinlivan said, and “we continue to see great momentum.” Competition in this field is clearly strong as banks’ online service fees for all but premium services have been eliminated. Washington Trust got rid of its $2.99 monthly charge last year, and BankNewport, which used to charge $4.95 for online bill payment, gave up on that as well.
Nelson Teixeira, call center and Internet banking officer at BankNewport, said online banking is expensive for the bank, but “Internet banking and online bill pay is a service we feel is essential to the business relationship. If we didn’t offer it, we’d lose the customers.”
Conversely, Teixeira and others said online banking boosts customer loyalty.
Asked how business customers differ from consumers in their online activity, most banks said they seem to care more about tracking their finances and less about paying bills – a consumer favorite. One online business user, attorney Wyatt Brochu, of Ruggiero, Orton & Brochu, in Warwick, said his office already writes checks on a computer – but on Quicken, not online. “It’s just out of habit,” Brochu said. “So we just cut the checks on that.”
Overall, most banks reported a lower online penetration rate among their business customers than with consumers. The exception was BankRI, where DeRentis said about 25 percent of personal customers use it, compared with 40 percent of businesses.
