U.S. Bank has launched a cash-flow forecasting tool for smaller commercial clients, the latest step in the Minneapolis bank's push to become a one-stop shop for the banking and payment needs of business owners.
The online banking feature, which went live for small-business customers last week, offers a projection of account balances for up to 90 days. It will draw on data from customers' bank accounts and their accounting software providers.
"We increasingly want to give our customer, the business owner, solutions that help them get home earlier to their families," Irv Henderson, U.S. Bank's chief digital officer for small business, said in an interview. "The small-business owner starts a business out of a passion or interest. They're often not accountants or statisticians or data scientists."
The cash-flow forecasting tool is the latest addition to U.S. Bank's
"Small businesses are managed like a jack-of-all-trades," Terry Dolan, the chief financial officer of parent company U.S. Bancorp, said in July. "They need a service offering that will connect all the different systems used in running their business in an integrated, seamless, convenient and simple way."
The cash-flow forecasting tool, which includes a 90-day lookback at cash balances, will provide advance warning about coming financial shortfalls. Over time, the banking subsidiary of U.S. Bancorp plans to add the capability to show forecasts under different scenarios.
The forecasting tool is aimed in particular at businesses with annual revenues of less than $2 million. Henderson said that about 50% of small businesses sit on fewer than 28 days of cash, and a similar percentage fail within their first two years.
Firms that do survive and grow will eventually have more complex banking needs. U.S. Bank is trying to build those relationships at a relatively early stage.
The banking industry now faces the challenge of how to build deep relationships with small businesses at a time when digital banking is becoming ubiquitous.
In remarks Monday at American Banker's Small Biz Banking Conference in Nashville, Tennessee, Henderson said that human capital is differentiating for banks, even as the industry is focusing on building better digital experiences.
Some analysts contend that
"I think the banker is going to be invaluable in that relationship — as an advisor, identifying the customer's needs, introducing that customer to other experiences at the bank," Henderson said.
In his remarks Monday, Henderson acknowledged that U.S. Bank is not unique in seeking to harness digital insights as a way to build deeper relationships with small-business customers.
"All banks are thinking about the same thing — this reimagination about the customer experience will be beyond core checking, savings, lending relationships," he said. "And in fact if you're not doing that, I think it'll be increasingly difficult for the next seven to 10 years."
Dolan made a similar point in July, describing U.S. Bank's efforts as part of a "race" in which "there's a real opportunity to be able to take market share."
