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North American Corporations Seek New Services From E-Banking Sites.

Although adoption of e-banking slowed among U.S. and Canadian corporations, businesses continue to seek increased functionality from the sites, according to Greenwich Associates.

U.S. and Canadian corporations are exploring ways to use e-banking, even as the actual percentage of North American businesses using e-banking remained level in 2001 for the first time in three years, at just over 60%, according to Greenwich Associates.

Nearly half of corporate e-banking users cite cash management as a key service. Foreign exchange, retirement plans and wire transfers are also frequently accessed online, with more than a quarter of users reporting use of each of these products. Anticipated use of these and other banking services is even higher, in several cases considerably so.

Greenwich conducted interviews with treasurers at 207 large corporations in the United States and Canada in June and July. Interview topics included level and types of e-banking activity, reasons for using and not using e-banking, and bank Web site evaluations.

"Although marketing drives adoption, use is driven by experience," said Greenwich Associates consultant Steve Busby, adding that this year's research reveals a richer future for corporate e-banking than have past studies. "Banks still have a ways to go in selling e-commerce to non-users, but the quality of the experience for current users is sufficiently high for them to continue to significantly expand their use."

Bank site use is becoming increasingly concentrated, with fewer sites being bookmarked by treasurers for subsequent visits. On average, treasurers today use only two or three bank Web sites regularly, indicating how important quality, ease of use, and functionality have become in Internet banking.

This carries an important message for banks, said Greenwich consultant Roger Gruss. "Based on how treasurers spend their time dealing with banks online--two-thirds is spent on information gathering or transaction initiation--the Internet capacity of a bank can have a major impact on traditional banking relationships."

Half of corporations say a bank's online capability is important in maintaining traditional banking relationships. One in three say they have directed more business to banks that have superior online capabilities.

Banks are still not considered highly effective at marketing their e-commerce capabilities. In particular, while bank relationship managers are still cited by 78% of corporations as the most effective and influential source for learning about Internet banking products and services, only 20% say their relationship managers are "e-knowledgeable."

"Fifty-four percent of corporations report having never received a marketing call about their banks' online capabilities," Greenwich consultant Pete Garrison said. "This is a fantastic missed opportunity."

Half of all corporations using bank Web sites say they do so to access research--the top driver of activity in past years, too. One out of every six corporate e-bankers cite accessing account information or ease of use as benefits. Just over 10% say they go to bank sites to initiate transactions or purchase products.

More than half of bank Web site users say they save time by doing their corporate banking online, 47% say they increase productivity, and 39% say they get customized research.

"But widespread gaps between expectations and service do exist, especially in such areas as access to information, reporting services, cash management functions, and real-time account information," Busby said, pointing out other Greenwich findings. "This is bad news for the bank Web sites now, but good news for those banks willing to take extra steps to deliver a higher level of online service satisfaction."

One in four corporations have used a B2B exchange, auction, or marketplace, according to Greenwich research. Among non-users, 19% say they plan to join such an exchange for procurement. Nearly 30% say they expect B2Bs to become "important" or "very important" to them in the next 12 months.

Three-quarters of current users say procurement is the primary reason for using B2Bs. Reduced purchasing costs, electronic bill payment, and presentment are also seen as important.

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