According to the J.D. Power 2018 U.S. Small Business Banking Satisfaction Study, only 37% of small business banking customers say their bank appreciates their business and just 32% say their bank understands their business.
Considering there are roughly 30 million small businesses (SMBs) in the United States, that’s a lot of unhappy customers. Or should we say, that is a lot of opportunity.
SMBs are primed to switch banking providers – and, according to the stories in this week’s must-reads, this is a market that prizes relationships, has an ongoing need for credit and loans, processes high volumes of transactions and payments, and is determined to grow.
But serving the SMB market isn’t as simple as extending your existing products and services to business clients. The relationship banking that small businesses want requires real expertise and high caliber products, services and access to credit/loans. And digital transformation appears to be even more of an imperative here.
Yet, here is a growing market in search of the kind of personalized, quality service credit unions excel at providing. Someone is going to capture some of that the share of SMB accounts expected to move banking providers in the near-future. Could it be you?
Digital Is Critical for Banking Providers in the Small-Business Market
Digital transformation is fast becoming a prerequisite for serving the SMB market, particularly as we look toward the future. Small and mid-sized businesses need help processing payments and invoices, for example, and would welcome tools that integrate with software programs like Sage Intacct and Quickbooks. Credit unions can venture into this kind of service as they become more digitally savvy, but will they?
New Data: Why One-Third of Small Businesses Want Real-Time Payments
Paper checks are neither modern nor efficient, yet half of businesses surveyed by PYMNTS and Mastercard report writing and receiving paper checks on a daily basis. Not only are businesses ready to embrace better alternatives, but they’re also eager to adopt real-time payments. A full 70 percent of businesses say they would benefit from real-time payments’ instant funds availability, while 59 percent say real-time payments would improve their cash flow and certainty.
Payment Automation for SMBs is Good for 2019 and Beyond
If you don’t see the value in serving the small- to mid-sized business market, fintech companies increasingly do. “The growing acceptance of virtual cards, sometimes referred to as v-cards, by small to mid-sized businesses (SMBs) increased exponentially in 2018 as suppliers embraced the improved security and convenience of this digital payment method over paper checks,” writes Payments Journal. “Yet, for most, the manual work of processing and reconciling the payments remains an ongoing challenge for the industry to solve in 2019. While there are automated reconciliation and straight-through processing (STP) solutions for large businesses, small businesses, in particular, continue to be underserved due to their smaller and less frequent invoices.”
What Percentage of Millennial-Owned SMBs Won’t Use Credit?
We won’t spoil the suspense by revealing the percentage, but will divulge that there’s a significant opportunity in courting millennial-owned businesses with credit accounts.
When Community Banks Die: How SMBs Are Affected
Small businesses have long relied on community banks for loans and services. As these institutions close or consolidate, many small businesses find themselves at sea. Here is a market that understands the value of relationship banking, even more so at this moment when digital tools and technology have the potential to improve operations and profitability.
Small Businesses Feel Underappreciated by Their Banks
Opportunity alert: only 32 percent say their bank understands their business. An apparent service gap exists in this market, with 61 percent calling themselves “branch dependent” and only 47 percent saying they use mobile offerings.
If you’re thinking about or already going after the SMB market, you’ll need the knowledge, tools and resources to help you stand out from the competition. Join us at THINK 19, May 6-8 in Miami, for four days of keynotes, breakout presentations and networking opportunities to help grow your business. Register now and enjoy a discount Fall Savings discount off the registration price.