4 simple ways you can help SMB banking customers
Image credit: Sensibill
When it comes to small business banking, the potential payoff is huge.
The SMB banking segment is worth nearly $850 billion worldwide, and in the USA alone, SMBs make up 99% of all businesses. For banks and credit unions, these SMBs represent a significant opportunity to capture a burgeoning market that, like consumers, needs support in achieving financial wellness.
There’s just one small problem for small business banking: most financial institutions have traditionally overlooked the SMB customer segment in favor of focusing on consumers. In doing so, most SMBs have been underwhelmed by the scope of services and solutions available to them. It’s no wonder these customers turn to challenger banks and alternative providers for their banking needs.
So, what can your FI do to better serve these SMBs, setting them up for success in the future while nurturing stickier business customers? It starts with providing the right financial tools and guidance, along with more robust digital banking solutions, to help SMBs thrive financially.
Let’s break down four simple yet effective ways your FI can do just that.
Leverage spend data to support SMB banking needs
The average small business typically only holds a 27-day cash buffer in reserve, wedging many SMBs between a rock and a hard place when that buffer runs out. Accessing better, more comprehensive tools and services from their banks and credit unions can quite literally be the difference between financial life and death for small business customers.
This is where SKU-level data comes in. Most financial institutions already have a wealth of data at their fingertips (thanks to years of transactions and banking activities from your customers), and it’s this data that you can leverage to do something incredibly crucial for your SMB customers: anticipate their needs.
How can data help your digital banking strategies?
With this data, you get key insights into your SMB customers, like how they spend their money, where they spend it, and how their businesses are performing financially. Now, you just need to start leveraging those insights to help these customers optimize their spend and take control of the financial futures of their business.
Use the power of personalization in digital banking
Providing the right products, advice, and solutions at the right time puts your FI in a unique position to nurture better SMB relationships. After all, no one enjoys being targeted with irrelevant offers or services that don’t truly benefit them. And, if SMB customers can’t get what they need from your FI, they’ll go elsewhere.
But personalization isn’t just about placing the right products in front of SMBs at the right time; it’s about driving financial resilience for them.
67% of millennials and 35% of baby boomers expect products and offers to be personalized; meanwhile, 83% of customers are willing to share personal data if it results in more personalized offerings.
When customers know that their FIs understand them, look out for them, and are tailoring their offerings to their needs, a mindset shift occurs: customers want those personalized services, so they’ll share the necessary data to get them.
Reap the rewards of better personalization
This goes hand-in-hand driving ROI for your bank. When it comes to revenue, personalization can drive up to 15% revenue growth for financial institutions and finserves, making personalization a critical part of your SMB banking strategies.
Provide the solutions SMBs are looking for
Between business and commercial banking accounts, cards and payments, lines of credit, small business loans, digital payments, and more, SMBs represent some of your FI’s greatest opportunities for growth. There’s just one problem: many SMBs are operating without the banking solutions they need to grow and succeed in their businesses.
To ensure your bank is offering SMB customers the right solutions and products, you need to think like an SMB. That means looking more closely at the products SMBs use outside of your FI, and how these products or services can be integrated with yours to make banking more convenient for SMBs.
Just imagine if your FI:
Offered more integrations for accounting software with your digital banking channels
Optimized payments and processing services within your digital tools
Streamlined new account opening and loan applications so they could be done digitally (and in mere moments)
These types of capabilities aren’t optional or “nice to haves”. The changing banking landscape for both consumer and SMB customers shows that the way forward for SMB banking is more robust and integrated digital banking solutions that help them manage all financial aspects of their business.
Simplify money management for SMBs
What if your digital banking tools allowed SMBs to manage all aspects of their finances? Put another way, if you could simplify financial management for SMBs using your digital experiences, why wouldn’t you?
It’s easy to say it but a little more complicated to actually do it. There are a few components that go into building digital experiences that are simple yet beautifully efficient for SMBs. For example, managing one’s everyday spend and expenses should be easy, but it’s often a pain, just like account opening, loan approvals, credit applications, claims processing, expense tracking, and more can typically be a trying experience for SMBs.
Want to support your SMB customers using data?
Consider that:
👉 SMB customers are growing wiser to the limitations that FIs have traditionally placed on them—like high retail banking fees, poor product recommendations, and difficult account opening processes
👉 Most digital banking tools aren’t designed to help SMBs specifically, but instead, favor consumers when it comes to managing everyday spend, expenses, and financial products
👉 Many FIs have SMB customers hiding in consumer accounts because there’s not enough incentive for them to switch to a real business banking account
Tired of missing out on SMB customers?
SMBs aren’t looking to manage their business and finances using a myriad of tools—they’re looking for the convenience, simplicity, and efficiency of an all-encompassing solution that your FI could be providing them. And the best part? This can all occur in your digital banking tools, helping to nurture loyal, engaged SMB customers who rely on your bank and trust you to help them thrive financially.
Meet the author, Jacalyn 🏔
Jacalyn is our Content Marketing Manager with a background in scaling Canadian startups and SMBs. When she’s not writing, you can find her outdoors, or hunting down the best craft beer in her city.