E-Banking Snapshot 33
Little use of advanced services
Digital economy and structural change
May 2010
E-finance at small firms
Small and very small firms are the backbone of the economy. They account
for 50% of employment and 40% of value added in Europe. However, larger firms
enjoy higher labour productivity due to economies of scale, modern processes and
better qualified employees. chart 1
E-finance is less popular among small firms. Large firms in Europe are more
likely to use online banking than small firms, but the difference is only a moderate
9 pp. In Germany it is practically nil. However, the shortfall is bigger when it comes
to more advanced features of e-finance such as e-invoicing (20 pp) and
automated payment instructions (27 pp). chart 2
Little surprise, you may say. Small firms are behind in applying modern IT
services in general. This also adds to the overall productivity gap. The difference is
biggest with the most advanced features, such as operating a CRM or ERP
system. chart 3
Online banking is a first step to advanced e-finance. Across Europe there is a
strong correlation between the adoption of online banking and more advanced
features of e-finance. Yet, there is no correlation between online-banking adoption
and other sophisticated IT applications, such as ERP. chart 4
Baltics ahead, Balkans need to catch up. In Estonia and Lithuania, the share of
small firms using online banking is highest, while in Bulgaria and Romania it is
lowest. In Germany, it is slightly above the EU average. chart 5
Online-banking adoption by small firms grows by 4% per year. This is less
than the 5% growth rate among large firms, hence the gap has widened over the
last few years. However, convergence will kick in eventually, if only because
adoption among large firms cannot rise much further. chart 6
What is personal, what is business? Particularly among owners of very small
firms, there is much overlap between personal and business affairs. As a
consequence, a majority of small business owners wants to keep personal and
business bank accounts with the same financial institution, according to a US
survey. chart 7
Author
Thomas Meyer
+49 69 910-46830
[email protected]
Editor
Antje Stobbe
Technical Assistant
Sabine Kaiser
Deutsche Bank Research
Frankfurt am Main
Germany
Internet: www.dbresearch.com
E-mail: [email protected]
Fax: +49 69 910-31877
Managing Director
Thomas Mayer
What about self-employed persons and freelancers? The propensity to bank
online rises with the degree of business responsibility. Evidence from Germany
shows that online banking is more popular with business owners than with selfemployed persons or freelancers. But even they are ahead of regular employees.
The only exception is self-employed farmers where living in rural areas may trump
being a business owner. chart 8
Interest in online brokerage is higher among business owners. Persons with
business responsibility are also more likely to be interested in trading stocks
online. This may be explained in part by higher incomes and better education but it
also appears that business owners and the like are simply more self-directed.
chart 9
E-Banking Snapshot 33
E-finance at small firms
Small powerhouses
Enterprises in the EU by size class, % of total (2005)
50
45
40
35
30
25
20
15
10
5
0
43
33
30
21
20
Very small (1-9)
19
18
17
Small (10-49)
Medium (50-249)
Employment
Large (>249)
Value added
Source: Eurostat, 2010
1
Small firms miss out on e-finance
Percentage of EU firms using these e-finance services, by number of
employees, 2009
87
85
78
56
41
41
28
29
21
Send or receive
electronic invoices
Automated data
exchange for sending
payment instructions to
financial institutions
Large (>249)
Small and very small firms are the
backbone of the economy. They
account for 50% of employment and
40% of value added in Europe.
However, larger firms enjoy higher
labour productivity due to economies of
scale, modern processes and better
qualified employees. back to front page
100
90
80
70
60
50
40
30
20
10
0
E-finance is less popular among small
firms. Large firms in Europe are more
likely to use online banking than small
firms, but the difference is only a
moderate 9 pp. In Germany it is
practically nil. However, the shortfall is
bigger when it comes to more
advanced features of e-finance such as
e-invoicing (20 pp) and automated
payment instructions (27 pp). back to
front page
Online banking
Medium (50-249)
Small (10-49)
Sources: DB Research, Eurostat, 2010
2
Little use of advanced IT applications
Percentage of EU firms using these IT applications, by number of employees
(2009)
96
90
89
100
80
80
67
60
60
49
60
40
22
12
Little surprise, you may say. Small firms
are behind in applying modern IT
services in general. This also adds to
the overall productivity gap. The
difference is biggest with the most
advanced features, such as operating a
CRM or ERP system. back to front
page
20
0
CRM
ERP
Use eHave website Broadband
government
Large (>249)
Small (10-49)
CRM: customer relationship management; ERP: enterprise resource management
Sources: DB Research, Eurostat, 2010
May 2010
3
2
E-Banking Snapshot 33
E-finance at small firms
Online banking is a first step to
advanced e-finance. Across Europe
there is a strong correlation between
the adoption of online banking and
more advanced features of e-finance.
Yet, there is no correlation between
online-banking adoption and other
sophisticated IT applications, such as
ERP. back to front page
Correlation among e-finance
Percentage of small EU enterprises, by country (2009)
R² = 0.52
Operating an ERP
system
30
Sending automated
payment instructions
45
40
R² = 0.01
25
35
20
30
25
15
20
10
15
10
5
5
0
0
40
60
80
Using online banking
100
40
60
80
Using online banking
100
4
Sources: DB Research, Eurostat, 2010
Baltics ahead, Balkans need to catch
up. In Estonia and Lithuania, the share
of small firms using online banking is
highest, while in Bulgaria and Romania
it is lowest. In Germany, it is slightly
above the EU average. back to front
page
Baltics ahead
Percentage of small firms using online banking, 2009
>90
85-90
80-85
75-80
70-75
50-60
40-50
n.a.
Estimates for DK, ES, FI and SE.
5
Sources: DB Research, Eurostat, 2010
No convergence, yet
Percentage of EU enterprises using online banking, by number of employees
90
85
80
75
70
65
60
CAGR: 5%
CAGR: 4%
2004
2005
2006
Large (>249)
2007
2008
2009
Small (10-49)
Sources: DB Research, Eurostat, 2010
May 2010
Online-banking adoption by small firms
grows by 4% per year. This is less than
the 5% growth rate among large firms,
hence the gap has widened over the
last few years. However, convergence
will kick in eventually, if only because
adoption among large firms cannot rise
much further. back to front page
6
3
E-Banking Snapshot 33
E-finance at small firms
Not strictly business
Share of US business owners who want to keep business and personal accounts
with the same bank, %
56
60
50
38
40
30
20
10
What is personal, what is business?
Particularly among owners of very
small firms, there is much overlap
between personal and business affairs.
As a consequence, a majority of small
business owners wants to keep
personal and business bank accounts
with the same financial institution,
according to a US survey. back to front
page
0
Business owners
(1 or 2 employees)
Business owners
(2-500 employees)
Source: Forrester Research Inc., 2009
7
What about self-employed persons and
freelancers? The propensity to bank
online rises with the degree of business
responsibility. Evidence from Germany
shows that online banking is more
popular with business owners than with
self-employed persons or freelancers.
But even they are ahead of regular
employees. The only exception is selfemployed farmers where living in rural
areas may trump being a business
owner. back to front page
Business responsibility encourages online banking
Percentage of Germans using online banking, by occupation (2009)
Business owners
61
Self-employed persons
50
Freelancers
47
Employees (managers)
43
Employees
26
Self-employed farmers
8
0
20
40
60
80
8
Sources: DB Research, TdW, 2010
Interest in online brokerage is higher
among business owners. Persons with
business responsibility are also more
likely to be interested in trading stocks
online. This may be explained in part
by higher incomes and better education
but it also appears that business
owners and the like are simply more
self-directed. back to front page
Similar picture with regard to online brokerage
Percentage of Germans interested in online brokerage, by occupation (2009)
Business owners
11
Freelancers
11
Self-employed persons
10
Employees (managers)
9
Employees
6
Self-employed farmers
5
0
5
10
15
Sources: DB Research, TdW, 2010
9
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ISSN Internet: 1619-4829 / ISSN e-mail: 1619-6465
May 2010
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