Deciding which technologies to invest in is no easier in small-business banking than it is anywhere else.
"It has been really tough," said Mark Pilotti, vice president in Capital One Financial's small-business bank. "There is a lot of testing. It's a moving target for us. We're trying to think about it as an omnichannel: How do I bring the bankers, the digital offerings, the branches together in a way that's relatively seamless to our customers?"
Pilotti and other small-business bankers shared some of their tech priorities at American Banker's Small Business Banking conference in Nashville, Tennessee, this week.
Making small business bankers' jobs easier
"I have a relentless focus on making it easier for our bankers to serve our clients," said Dee O'Dell, head of business banking sales at U.S. Bank. His team makes loans to companies with $2.5 million to $25 million in revenue. "Anything that we can do to make our processes faster, easier, getting to yes more often, that really allows our bankers to, with confidence, spend more time in the market in front of clients."
This year, the bank rolled out new analytics tools and training to help small-business bankers optimize how they spend their time, so that when they are in front of clients "we could provide greater advice to them in the very turbulent environment they're operating in, in the midst of a rate environment none of us would have anticipated a year ago," O'Dell said.
U.S. Bank, a unit of U.S. Bancorp in Minneapolis, has also created dashboards based on Power BI using Salesforce data that provide insights. For instance, the dashboards track new client revenue.
At BMO Financial Group, Niamh Kristufek, head of U.S. business banking, also wants to make work easier for business bankers.
"What are we doing to please and make it easy for the branch banker who's already dealing with so much?" she asked, noting the rising interest rates and drop in small-business borrowing. "It's going to be a rough year, so put your arms around your bankers because if they stick with you, you're going to survive."
The McLean, Virginia-based Capital One serves small businesses with up to $20 million of revenue through a mix of in-person bankers, a virtual banking team that meets with customers over phone and video and at branches. One goal it has is to make virtual bankers more capable.
"What's really interesting for us this year is we continue to push the bounds of a virtual offering," Pilotti said. "What can a virtual banker do? What kind of customer can they actually service? We saw during [the Paycheck Protection Program] that the digital readiness of small businesses accelerated. So we're trying to meet the customer where they are."
BMO's virtual relationship managers each handle about 300 customers. The Toronto-based company provides these remote bankers with analytics that say things like, this customer needs to be contacted four times a year, this one twice a year.
"We put the analytics behind that so they know how often to contact their customer if their customer's not proactively contacting them," Kristufek said.
Seamless onboarding and online self-service
The smallest businesses are looking for digital experiences, Pilotti said.
"They're looking for something more akin to what you get as a consumer or what they're getting with their fintechs," he said. "If somebody signs up for [the payments processor] Stripe, in three or four clicks, they're up and running. We see a challenge in both the simplicity of the delivery, and the experience."
Capital One is working with fintech partners on payments. It's also aiming for easy onboarding of small-business customers.
"We're spending a disproportionate amount of time and energy trying to figure out, can we seamlessly and easily onboard new customers using a self-onboarding process," Pilotti said.
This is also a priority at U.S. Bank.
"Seamless onboarding of everything: Wow," O'Dell said.
U.S. Bank has been building tools to allow customers to serve themselves on the web or in the app, while always having the option to connect with a human.
"We talk a lot about the digital-plus-human balance," O'Dell said. "The investment there is to provide the tools for the clients to be able to go down their journey on their own using those digital tools."
But once the customer has onboarded on their own, the bank tries to take a "banker-led" approach to selling other services like payments and treasury management.
At Atlantic Union Bank in Richmond, Virginia, "we just don't have in-house capability to build the technology," said Shawn O'Brien, consumer and business banking group executive. Instead, the $20 billion-asset bank matches small-business owners with bankers.
"Our value proposition is that regardless of your size, you will have a banker, and that person will work with you in person, whether it's in the branch or as a business banker," he said.
That said, "that doesn't mean we can't have or shouldn't have good technology," O'Brien said. The bank is replacing all its online banking software, moving to a system from the digital banking software provider Q2.
Kristufek noted that the small businesses with less than $1 million of annual revenue that use BMO's branches (larger companies are covered by relationship managers), want it all. They don't want to have to think about banking during the workday.
"I want you to be invisible because it works so well," she said of the very small-business owner's mindset. "But when I do call you, I want you to know my business and have good advice."
Digitizing the branches
BMO has spent "a good chunk of money" in the last few years on digitizing its branch experience, Kristufek said.
"Small-business owners are still opening accounts more in the branches than online," she said. "And how do we have a more digital seamless experience?" The bank has created an app for deposits, loans and credit cards.
"So when you open a deposit account, you can do lending and card at the same time," she said.
The app can be used to make real-time decisions on loans of up to $100,000.
"That is great for the customer because they don't go away dreaming of the loan they're going to get when they're not going to get it," Kristufek said. "Small-business owners who apply for a loan spend two to three weeks thinking of how they're going to expand and then they get declined."
But there's an emotional downside to such quick decisions.
"The awkward part of that is our bankers are not great at having decline conversations in real time," Kristufek said. "They don't like telling customers no. They like the safety of [the customer] getting a decline letter in the mail three weeks from now."
The bankers have no choice: As soon as they hit submit on a loan application, the decline email is in the customer's phone in front of them.
"So they can't avoid the difficult conversation," Kristufek said.
However, there is value for the customer in the bankers explaining why they don't qualify.
"You are actually helping them make financial progress by educating them on what they need to do," Kristufek said. "So the innovation is great, but if your humans aren't ready for it, it's going to not get used."
