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Banking Online

Entrepreneurs have been slow to adopt online banking--with good reason. But some banks are trying hard to win them over.

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This story appears in the October 2005 issue of Entrepreneur. Subscribe »

In theory, the convenience and simplicity of online banking make it a godsend for busy entrepreneurs. Yet recent surveys show that small-company CEOs are slow to migrate their business banking online, lagging behind consumers and big companies.

A survey released in December 2004 by Forrester Research found that while small-business owners are active internet users, only 19 percent of those surveyed were actively using online banking, and just 13 percent were actively paying bills online. The "Small Business Research 2005 Study," performed by Edgar, Dunn & Co., a global financial services and payments consultancy, and Collective Dynamics, a management and technology consulting firm, found that while 57 percent of responding entrepreneurs used online banking daily or weekly, only half paid their bills online; 28 percent had no interest at all in online banking. Why? The most commonly cited reason, reports John Bresnahan, director at Edgar, Dunn & Co., was concern about internet security.

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