Want to win small-business clients? Give them a better digital banking solution


By Missy Rose, Senior Product Manager, Apiture

When community banks pursue small-business customers, they face an uphill battle if larger institutions are in the sales mix. In fact, more than half (58%) of small businesses use services from one of the Big 4 banks, according to a recent Aite-Novarica Group report. Often, Big 4 banks win in the end because they give away non-interest-bearing banking services to their customers for free. Further, small businesses sometimes view large, national banks as more innovative and faster to adopt new technology, adding to the perception of a richer product experience.

As community banks attempt to attract business clients, how do they differentiate themselves in the marketplace to grow their small-business segment?

What appeals to small businesses
Small businesses’ banking needs are typically more complex than consumers’ needs, and businesses expect a wide range of capabilities when selecting a financial institution. The bare minimum of business deposits, loans, and payments is no longer an effective option for institutions serving these customers. Instead, small businesses need capabilities to manage cash flow, support financial reporting and digital invoicing, as well as ways to easily collect payments and to pay employees and suppliers—and they want to access these features digitally.

To effectively compete, an institution’s digital business banking platform must be on par. The Aite-Novarica Group report reveals that 60 percent of small businesses would be likely or very likely to bank with a community or small bank if it offered capabilities and online banking experiences comparable to those of larger banks.

Make banking easy
It is important for small businesses to simplify the banking process for their users so that they can focus on running their business. A modern, connected banking experience allows the businesses’ end users access to preferred external systems. A good platform will integrate to industry-specific platforms and external accounting systems, allowing business owners and finance professionals to manage funds and complete transactions inside the digital banking experience. Business banking solutions should emphasize convenience, making it possible for end users to achieve complex tasks, such as paying suppliers or paying down loans, from a single location. With a connected platform, businesses can learn about products and services at the point of need.

Treat businesses like you know them
Presenting personalized content based on what is known about small-business clients should be finessed to be helpful, rather than intrusive. And in the case of winning over small businesses, personalization is expected and appreciated. According to the Aite-Novarica report, 48 percent of small businesses say a personalized experience is important or required to keep their business. Community financial institutions can start working toward this goal by investing in a data intelligence solution, taking the data they already have and using it to improve the user journey. Employing this cutting-edge technology will establish a commitment to innovation.

Offer more products
Just as mobile devices continue to incorporate new features and functionality to evolve the mobile experience, so should a business banking platform continue to add functionality to increase user convenience. Small businesses are looking for digital solutions that offer nontraditional products, such as invoicing, faster payments, and forecasting. In fact, 66 percent of businesses measured in the Aite-Novarica report state they would be more likely to give their valuable payments business to an institution that offers a richer product selection.

Don’t go it alone
The Big 4 banks have the benefit of large development shops, but community banks usually don’t have the same budget or scale. When looking for business banking capabilities, a smaller institution’s best bet is to partner with a digital banking provider that has already built out in-demand capabilities. When seeking an optimal partnership, select a provider with an open and modern platform, an API-first strategy for easier integration with third-party platforms, embedded analytics for high levels of personalization, and a forward-looking roadmap.

Give businesses what they want
When examining the majority of small businesses that use a large, national bank for their business banking needs, it is clear what they value in a banking platform—rich product options, seamless connections and personalization capabilities. A robust business banking platform that offers the convenience of a single platform with integrated consumer and business banking is likely to provide the best experience, enabling small-business owners to access consumer accounts with a single login.

Selling the solution
Truly, community banks can differentiate their offerings and stand out from the crowd by focusing on a complete digital banking solution. When a financial institution’s digital banking solution is on par with the best solutions available, they have a fighting chance to win small business clients. Without the advanced capabilities businesses are seeking, though, chances are that these clients will look elsewhere. An investment in building a best-in-class business banking platform will pay dividends with existing small business customers, and it could lead to new business opportunities.

Learn about Apiture’s business banking platform and download the Aite-Novarica Group business banking report, How Community Financial Institutions Can Make Money From Business Clients, to learn more about how to enhance your business banking capabilities.