US Banker | January 2010 | Marian Raab
As a small-business owner, Rexford's concerns are pretty typical. Industry experts and analysts say that branch proximity and attractive account rates and fees are among the top concerns cited by small-business owners looking to open new bank accounts.
But Rexford is atypical for a self-employed entrepreneur in planning to open a business banking account at all.
Among the nearly 26 million small firms in the United States, about two-thirds don't have business-bank accounts, according to a Javelin Strategy & Research report released last year.
The bulk of these firms tend to be "overlooked and underserved" by most banks, according to the report examining the underbanked business segment.
Small companies usually "hide in the consumer banking platforms," according to Javelin, a Pleasanton, Calif.-based consulting firm. That means they pay lower account maintenance fees now, but likely won't get specialized services they'll need as they grow, including payroll/invoice management, remote deposit capture, corporate cards and specialized commercial lending.
"Banks need to refine their strategies so that they are recognizing this market and helping small businesses," says Mary Monahan, a managing partner and research director of Javelin.
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