We have chosen to highlight a cross-section of our 2021 resources. We believe they are worth revisiting, even into the next year. For easy reference, we've organized them into three overarching themes.
If there is one take-away, however, it is this: that we as an industry must change and adapt if we are to continue to remain relevant to our small business customers. There is no better time to start than in 2022.
Lesson #1:
Small businesses are evolving, but banks aren't keeping up
For obvious reasons, the last two years have deeply impacted the way consumers buy and pay for goods. As businesses have transitioned from in-person to online, digital solutions have become even more crucial to their ongoing success. Several eye-opening statistics have confirmed the reshaping of consumer payment behavior. Despite the many challenges, the number of small businesses continued to rise in 2021.
Lesson #2:
Small business has become a foothold for digital-first disruptors
For a growing wave of fintech challengers, digital invoicing and payment acceptance have become a foothold for attracting and engaging small business customers. From this position, they have slowly disintermediated the financial institution by offering banking-related add-on services. To stay competitive, financial institutions must take a page from these savvy platform providers by embedding much needed financial services capabilities into their existing digital channels — improving customer retention, deposits, and cross-sell opportunities.
Lesson #3:
Small business banking needs to be reinvented, starting now
Most financial institutions want small business relationships. The struggle is that they are not well positioned to effectively service or support the unique, and evolving, banking needs of small business owners. Innovative non-bank providers have seized this opportunity through low-friction digital products that are designed to solve workflow-related pain points. FIs can compete — and take back customers. But it will take a smart mix of technology and services, with the ongoing support that will ensure their success.
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