TABLE OF CONTENTS

EXECUTIVE SUMMARY	
SEGMENTING THE SMALL BUSINESS MARKET	
FOCUS ON DEPOSITS TO IMPROVE CUSTOMER RETENTION	
STRATEGIES TO IMPROVE DEPOSITS	
BETTER PERFORMANCE OF BANKS FOCUSED ON SMALL BUSINESSES LENDING	
STRATEGIES TO IMPROVE LENDING	
CREATING SUCCESSFUL BUSINESS MODEL FOR SMALL BUSINESS BANKING	

1 INTRODUCTION	
	1.1	REPORT PURPOSE	
		1.1.1	REPORT CATALYST	
	1.2	REPORT STRUCTURE	
	1.3	RESEARCH OBJECTIVES	
	1.4	RESEARCH METHODOLOGY	

2 DEFINING SMALL BUSINESSES	
	2.1	KEY FINDINGS	
	2.2	U.S. SMALL BUSINESS MARKET	
	2.3	DEMOGRAPHICS	
		2.3.1	BY ETHNICITY	
		2.3.2	BY GENDER	
	2.4	GEOGRAPHY	
	2.5	NUMBER OF EMPLOYEES	
	2.6	INDUSTRY	

3 STRATEGY FORMULATION	
	3.1	KEY FINDINGS	
	3.2	BANKING NEEDS OF SMALL BUSINESSES	
	3.3	BANK STRATEGIES FOR SMALL BUSINESS NEEDS	
	3.4	CHALLENGES IN SERVING SMALL BUSINESSES	
	3.5	SMALL BUSINESS BANKING STRATEGIES	
		3.5.1	DEPOSIT PRODUCTS	
		3.5.2	STRATEGIES FOR ATTRACTING DEPOSITS	
			3.5.2.1	Simplified and innovative product set	
			3.5.2.2	Emphasis on product packaging	
			3.5.2.3	Competitive pricing for deposits	
		3.5.3	LENDING	
			3.5.3.1	Credit card products	
		3.5.4	OPERATIONAL STRATEGIES	
			3.5.4.1	Centralizing process to reduce operational costs	
			3.5.4.2	Segmenting strategies	
	3.6	SMALL BUSINESS SPENDING ON FINANCIAL PRODUCTS AND SERVICES	
	3.7	WINNING MODEL FOR SMALL BUSINESS BANKING	
	3.8	LENDING TO SMALL BUSINESSES	
		3.8.1	NIM, ROA AND ROE COMPARISON	
		3.8.2	BENCHMARKING LENDERS	
			3.8.2.1	Banks with asset size of more than $50 billion	
			3.8.2.2	Banks with asset size of $10 billion-$50 billion	
			3.8.2.3	Banks with asset size of $1 billion - $10 billion	

4 KEY TRENDS IMPACTING DEMAND OF SMALL BUSINESS BANKING PRODUCTS	
	4.1	KEY FINDINGS	
	4.2	TRENDS SUPPORTING SMALL BUSINESS BANKING	
		4.2.1	99.7% OF BUSINESSES ARE SMALL & MEDIUM ENTERPRISES	
		4.2.2	IMPROVING ECONOMY TO HAVE A POSITIVE IMPACT	
			4.2.2.1	Increasing small business confidence index	
			4.2.2.2	Increased sales and profit expectations of small businesses	
		4.2.3	INCREASING GOVERNMENT SUPPORT TO IMPROVE CREDIT AVAILABILITY	
		4.2.4	GREATER SCOPE FOR UP-SELLING AND CROSS-SELLING	
		4.2.5	INCREASING ADOPTION OF TECHNOLOGY AMONG SMALL BUSINESS OWNERS	
		4.2.6	UNDERBANKED SMALL BUSINESSES EMERGING TARGET FOR BANKS	
		4.2.7	SMALL BUSINESS LENDING EXPECTED TO INCREASE IN 2010	
	4.3	RESTRAINTS IN SMALL BUSINESS BANKING	
		4.3.1	INCREASINGS FAILURE RATE OF SMALL BUSINESSES	
		4.3.2	RISING TRENDS IN SMALL BUSINESS LOAN DEFAULT RATE	
		4.3.3	BREAKDOWN OF THE FINANCIAL MARKET	

5 CASE STUDIES	
	5.1	KEY FINDINGS	
	5.2	WELLS FARGO	
		5.2.1	CHALLENGES IN LENDING TO SMALL BUSINESSES	
		5.2.2	STRATEGIES ADOPTED TO ADDRESS CHALLENGES	
			5.2.2.1	Segmenting the small business market	
			5.2.2.2	Identifying the target segment	
			5.2.2.3	Reaching the target segment	
			5.2.2.4	Community and relationship based lending for minority businesses	
			5.2.2.5	Developing a credit scoring model for small business lending	
		5.2.3	LENDING TO SMALL BUSINESSES DOUBLED IN FOUR YEARS	
		5.2.4	DEVELOPMENTS THAT HELPED INCREASE SMALL BUSINESS LENDING	
		5.2.5	CONCLUSION	
	5.3	SAFE CREDIT UNION	
		5.3.1	OBSACLES IN SAFE’S GROWTH PLAN	
		5.3.2	STRATEGIES TO OVERCOME THE CHALLENGES	
		5.3.3	ONLINE FINANCIAL MANAGEMENT SOLUTION	
		5.3.4	SAFE SELECTS FINANCE WORKS FROM DIGITAL INSIGHT	
		5.3.5	MEASURABLE OUTCOMES	
		5.3.6	CONCLUSION	

6 VENDOR ANALYSIS	
	6.1	INTRODUCTION	
	6.2	ONLINE FINANCIAL MANAGEMENT BANKING TOOLS	
	6.3	KEY FEATURES	
	6.4	VENDOR BENCHMARKING	
		6.4.1	FUNCTIONAL BENCHMARKING	
		6.4.2	MARKET BENCHMARKING	
		6.4.3	COMMERCIAL BENCHMARKING	
	6.5	VENDOR PROFILING	
		6.5.1	INTUIT INC.	
		6.5.2	FISERV	
			6.5.2.1	Products and services	
			6.5.2.2	Recent developments	
		6.5.3	JWAALA	
			6.5.3.1	Products and services	
			6.5.3.2	Recent Developments	
		6.5.4	HARLAND FINANCIAL SOLUTIONS	
			6.5.4.1	Products and services	
			6.5.4.2	Recent developments	
		6.5.5	SI SOLUTIONS	
			6.5.5.1	Products and services	
			6.5.5.2	Recent Developments	
		6.5.6	YODLEE	
			6.5.6.1	Products and services	
			6.5.6.2	Recent developments	

 
LIST OF TABLES

TABLE 1		BANKS AND DEVELOPMENTS	
TABLE 2  	BANKS AND PRODUCT BUNDLING	
TABLE 3 	BANKS AND NEW DEVELOPMENTS	
TABLE 4  	OPERATIONAL CHANGES INTRODUCED FOR IMPROVING SMALL BUSINESS LENDING	
TABLE 5 	COST COMPARISON FOR VARIOUS BANKING CHANNELS	
TABLE 6 	SOLUTIONS OFFERED BY KEY VENDORS	
TABLE 7 	FUNCTIONAL BENCHMARKING: ONLINE FINANCIAL MANAGEMENT TOOLS	
TABLE 8  	VENDOR SCORE: ONLINE FINANCIAL MANAGEMENT TOOLS	
TABLE 9 	COMMERCIAL BENCHMARKING: ONLINE FINANCIAL MANAGEMENT SOLUTIONS	
TABLE 10 	RECENT DEVELOPMENTS (2007-2010)	
TABLE 11  	RECENT DEVELOPMENTS (2007-2010)	
TABLE 12 	RECENT DEVELOPMENTS (2007-2010)	
TABLE 13 	RECENT DEVELOPMENTS (2007-2010)	


 
LIST OF FIGURES


FIGURE 1 	GROWTH OF SMALL BUSINESSES (MINORITY & NON MINORITY)	
FIGURE 2 	MINORITY OWNED BUSINESSES IN 2002	
FIGURE 3 	ARC LOANS TO SMALL BUSINESS OWNERS	
FIGURE 4 	GENDER BASED CLASSIFICATION OF SMALL BUSINESSES (2002)	
FIGURE 5 	GEOGRAPHICAL DISTRIBUTION OF SMALL BUSINESSES	
FIGURE 6 	MAJORITY OF SMALL BUSINESSES HAVE LESS THAN 10 EMPLOYEES (2007)	
FIGURE 7 	SMALL BUSINESSES SEGMENTATION BY INDUSTRY (2007)	
FIGURE 8	 SMALL BUSINESS BANKING PRODUCT NEEDS OVER THE BUSINESS LIFECYCLE	
FIGURE 9  	CHALLENGES FACED BY SMALL BUSINESS OWNERS DURING ECONOMIC CRISES	
FIGURE 10  	CURRENT CHALLENGES FACED BY SMALL BUSINESSES	
FIGURE 11 	KEY CHALLENGES & STRATEGIES	
FIGURE 12 	ADOPTION OF VARIOUS SMALL BUSINESS DEPOSIT PRODUCTS	
FIGURE 13 	USAGE TREND OF LENDING SOURCES AMONG SMALL BUSINESSES	
FIGURE 14 	IMPACT OF CENTRALIZATION OF PROCESSES ON CUSTOMER CONTACT TIME		
FIGURE 15 	SMALL BUSINESS SPENDING ON FINANCIAL PRODUCTS & SERVICES	
FIGURE 16 	WINNING MODEL FOR SMALL BUSINESS BANKING	
FIGURE 17 	SMALL BUSINESS LENDING SHARE, BY ASSET SIZE	
FIGURE 18 	NIM, ROA AND ROE COMPARISON FOR SMALL BUSINESS BANKS (2007)	
FIGURE 19 	BENCHMARKING LARGE LENDERS ON THE BASIS OF SMALL BUSINESS LENDING (ASSET SIZE > $50 BILLION)	
FIGURE 20 	BENCHMARKING MID SIZE LENDERS ON THE BASIS OF SMALL BUSINESS LENDING  (ASSET SIZE $10 BILLION - $50 BILLION)	
FIGURE 21 	BENCHMARKING SMALL LENDERS ON THE BASIS OF SMALL BUSINESS LENDING (ASSET SIZE $1 BILLION - $10 BILLION)	
FIGURE 22 	SMALL BUSINESS GROWTH TRENDS	
FIGURE 23  	SMALL BUSINESS CONFIDENCE INDEX	
FIGURE 24 	SALES AND PROFIT EXPECTATIONS OF SMALL BUSINESSES	
FIGURE 25 	CROSS-SELL RATIO	
FIGURE 26 	UNDERBANKED SMALL BUSINESSES	
FIGURE 27 	SMALL BUSINESS BANKRUPTCY RATE	
FIGURE 28 	7(A) AND 504 LOAN APPROVAL TRENDS	
FIGURE 29  	MAPPING WELLS FARGO PERFORMANCE AGAINST INDUSTRY PERFORMANCE	
FIGURE 30 	COMPARISON OF VENDORS ON THE BASIS OF NUMBER OF CLIENTS