NetBank's New Niche: Small Business

NetBank (Atlanta) has extended its services to provide a new banking program and marketing Web site to serve the small business market. The program, which started in June, aims to combine the technological advances of virtual banking with the relationship management offered by branch banks. NetBank (assets of about $4 billion) licenses a version of Hillsboro, Ore.-based Corillian's Voyager and combines it with some internally designed technologies in order to create a platform for customers to process transactions and use features such as e-statements, e-notices and check imaging interfaces.

"You don't have to leave your business for 45 minutes or two hours to go and stand in line at a bank branch or sit in a drive-in lane waiting to make a deposit," says Bert Davis, NetBank's director of Small Business Banking. "It's 24-hour access and technologically advanced, and...you don't have to give up the benefits of traditional banking."

Some of the features of program are dedicated relationship managers who are reachable via phone or e-mail, and a dedicated customer-care unit that can be contacted for transactional needs and can manage a customer's small business and personal banking inquiries. Customers also have enhanced account administration features that allow business owners to set up multiple accounts and set authority levels for each user. Customers also can make 10 free online payments monthly, and can receive e-mail notifications when new electronic bills are sent to their accounts.

NetBank chose Corillian's platform for its flexibility and its compatibility with the bank's applications, says the institution's chief technology officer, Tom Cable: "What we did was take the small business product and implemented the things that are really needed for small business, such as authorizations to do certain functions. That's one of the things that sets our small business product apart from retail."

NetBank launched the program because it felt small business owners, such as wholesalers, manufacturers and service professionals like doctors, lawyers and CPAs were underserved in the Net banking market, Davis says.

"There were opportunities for companies that wanted the convenience and the technological advantages that they can get from banking over the Internet, but they didn't want to give up the personal relationship that they might have with a local branch officer," Davis says. "You didn't have the choice to have the relationship advantages and maintain the technological edge that you get with our type of delivery channels."

The program may benefit those involved in professional services. However, it might not be suitable for businesses that rely mostly on cash transactions, according to Chris Musto, vice president of research for Gomez Inc. (Waltham, Mass.). "The challenge can be overcome for banks with little to no branches," says Musto. "Especially in small business, where it tends to deal with wires and credit cards, you may deal very little with actual cash." Although "it has been hard for Internet-centered banks to be the primary bank for people who deal a lot with cash ... if you are a professional, like a doctor or lawyer, there is little" in the way of cash transactions.

The initial response to the program has exceeded the bank's expectations, NetBank's Davis says, and the program opened approximately 500 accounts in its first eight weeks.