E‐banking and the SME/bank relationship in Northern Ireland

Abstract

Internal and external forces continue to impact on the financial service sector, making it ever more difficult for traditional banks both to retain their existing small to medium‐sized enterprises (SME) client base, and to acquire new business clients. The traditionally poor relationship between banks and their small corporate clients has been well documented throughout the years; however, the increased use of electronic banking channels by SME banking customers threatens to change the very nature of that relationship. This paper examines the current nature of the relationship between SMEs and their banks in Northern Ireland and investigates the level of usage of and satisfaction with electronic banking channels in this region. Empirical findings from a research study that included one focus group with members of the Federation of Small Business (FSB) (Northern Ireland members only), interviews with local managers from three traditional banking providers, and a survey of 250 SMEs (Northern Ireland members of FSB) are presented.