Banks Need a SMB Value-Added Strategy
By Dave Crook
In this digital era, banking has been playing catch-up with the significant changes in the broader business community, particularly with SMBs.
And for many FIs, SMB checking account products seem more a “blast from the past” than other products.
Sometimes it’s because there’s a sense that most SMBs have migrated to megabanks and big regionals. Sometimes it’s because SMB accounts have simply been left on “set and forget.”
But there are new opportunities for FIs interested in delivering the value-added accounts SMBs are craving. Here’s proof:
We recently commissioned a study on the SMB sector and what they want in checking account products.
The biggest surprise: While most of SMBs’ primary accounts are with megabanks and the largest regionals, the SMB leaders aren’t satisfied enough with those relationships.
About two-thirds of SMBs are somewhat or very likely to look for new banking relationships in the next 12 months.
Among SMBs with annual revenue between $10 million and $100 million, that percentage rises to 77%.
This is the reason that delivering a SMB checking product that helps SMBs in their modern challenges is key to winning back SMB accounts from megabanks as well as local competition and retaining SMB customers.
What’s more, when asked why SMBs might consider a new banking relationship, nearly four in 10 indicated they wanted to get better business checking account product features and capabilities as well as better relationship management for their accounts.
This is precisely the value proposition that community FIs have dominated for decades.
But in the digital era, those needs have shifted and it’s important for community FIs to make sure they’re delivering for their SMBs with modern products that address their needs.
Here are some key needs expressed by SMB leaders that we surveyed:
Deliver on Cybersecurity
Digital security is no longer a nice-to-have feature for individuals and businesses. LifeLock recently reported that 75% of consumers have been victims of some sort of identity theft.
And for SMBs, the challenges are greater since they’re dealing with scores of individuals that may be security exposed, but they also have to protect their own operations, internally and externally.
A 2023 ITRC Business Impact Report shows that 73% of SMBs suffered a cyberattack, data breach or both last year. That’s up nearly two-thirds from 2022. And 42% of SMBs that were attacked reported losing money because of it. Nearly a third reported losing customers’ trust.
What’s more, most of these SMB leaders aren’t cybersecurity experts, so selecting digital security services is overwhelming, especially as they strive to grow their businesses.
That’s where financial institutions can help deliver the kind of information security products that deliver fundamental digital security services for their businesses and their employees as part of their SMB checking product.
Value for Owners and Leaders
Study after study also reveals that SMB leaders aren’t sure what they need to build their business outside of managing the business they have started. Community FIs can help them keep their focus where it belongs by becoming a better partner to owners and leadership using the benefits of a modern checking product.
Most leadership has little time to devote to Treasury services, cyber liability insurance, or payment processing services. Help them get it right the first time by providing a checking product with these kinds of features included.
It also underscores the value you place in these relationships. Many newer, digital driven businesses are also keenly interested in working with their financial institutions for insights and recommendations to grow their businesses. Creating a unique, modern, valuable SMB checking product is powerful proof your FI wants to help.
And it also differentiates your SMB product from the competition - whether it’s megabanks or other community FIs.
Value for Employees
Another benefit of offering products and services for SMB customers is the fact that SMB’s employees also get the benefits of those services and discounts as well.
If growing SMB accounts is a top priority, another key goal is to attract the leaders and employees of those SMB accounts to the financial institution as well.
Creating a checking product with significant benefits for the SMB and employees is also great real-time advertising for all the people that work for the SMB to get their own consumer accounts with similar features directed at consumers. Few SMB products offer such a powerful “try before you buy” approach to promoting consumer checking products.
Our Unique Solution: BaZingBiz
This is why we built BaZingBiz.
Having worked with community FIs for more than two decades and recently surveying more than 1000 SMBs, we’ve distilled the kind of features that SMBs want and community FIs can deliver.
And we built it with community FIs in mind. It can be launched in three months or less. It doesn’t take a massive reorganization of staff or new technology stacks.
We also work shoulder to shoulder with you using our decades of experience to make sure the product succeeds from the outset. And we stay with you to make sure you get the support you need far beyond implementation.
What’s the payoff? Our community FIs using our checking products show increased primacy, rising non-interest income, growth of interchange fees, new customer acquisition, and product differentiation that are key in an increasingly competitive marketplace.
Interested in learning more? Contact me at dave.crook@strategycorps.com or go to BaZingBiz to see what this unique checking product offers in more detail.
Dave Crook is President and Chief Revenue Officer at StrategyCorps. You can connect with him at dave.crook@strategycorps.com.