Delivering on the Small Business Banking Customer Experience – TechToday

According to the Small Business Administration, small companies generate 1.5 million jobs per year and account for 64% of new jobs in America. Small businesses also comprise 44% of U.S. economic activity, so as the number of new businesses expands,
their economic contributions grow as well.

Community banks are critical engines to the economic expansion of small businesses – and therefore the country. Community banks help drive the local economy within many U.S. communities.  According to a 2020 FDIC study:

“Small businesses often need funding, for example for inventory, working capital, or accounts receivable financing. Despite holding only 15 percent of total industry loans in 2019, community banks held 36 percent of the banking industry’s small business
loans. Community banks focus on building relationships with small business owners and tend to make loans that require more interaction with the borrower.”

And according to a 2022 Deliotte study:

“The new wave of small businesses presents a generational moment of customer acquisition in which banks stand to win or lose the lifetime reward of providing financial services to that business.”

Community banks’ foundational role can be extended by cultivating personal and digital relationships with small business owners. Many of the community and regional banking executives with whom I interact consider it essential to make their business banking
digital customer experience both unique and exceptional.

How community banks can create a unique experience 

Online commercial banking for small businesses gets banks into the game but offering a business banking hub of expanded financial services can provide a truly unique business user experience.

Through such a portal, a community bank can provide foundational services such as wires, ACH, and positive pay. Other essential financial services solutions can be offered as well:

  • Payroll
  • Invoicing
  • Accounts payable

Address small business needs in payments and accounting

Ancillary financial services offered by a trusted advisor become a logical extension of community banks’ product suites.  In a recent Cornerstone survey of small businesses, small business owners and executives – particularly those from larger organizations
– expressed an interest in obtaining accounting and payments services from a bank.

Roughly four in ten small businesses with revenues greater than $5 million said they would “definitely” consider a bank for their accounting, invoicing, bill pay, and payment acceptance services. This creates a tremendous opportunity.

APIs are the enabler 

Extending financial services via a business banking hub need not be limited to offerings from a bank’s technology partner. Today’s powerful APIs enable integration of unique solutions that fit seamlessly within a community bank’s online services.

Standard API offerings from a technology partner should come within a comprehensive suite of solutions designed with a deep understanding of the banking sector.  API offerings should also encompass areas such as core banking, risk management, accounts payables,
compliance, and payments.

If bankers want to interact with core technology partners who can expand the user experience of their business customers, they should be able to do so quickly and smoothly. Their technology partners should also provide comprehensive, “how-to” documentation
that includes use cases and developer guidance to enable seamless application integration into a business banking hub.

Provide education and insight for small business 

A small business hub can also provide education, serving as a source of financial knowledge that can be especially valuable for small business owners.

Start-up companies may need to understand the basics of running a business and developing financial statements, while businesses applying for loans may need education on the lending process, credit guidelines, and banking policies.

I’m familiar with one community bank customer that provides knowledge through a series of business blogs with topics ranging from accepting contactless payments to the differences between an SBA loan and a commercial loan.

Whether providing relevant small business education, traditional cash management services, or unique ancillary products, a business banking hub enables community bankers to design unique experiences for small business customers.



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