Small business can be a BIG OPPORTUNITY for financial services – you only need to understand what they need to meet the challenges of today and tomorrow.
Based on our research, small businesses are highly focused on growing their customer bases while reducing costs and fighting inflation. There are five key areas they want their primary banking provider to deliver on in order to earn their business. They are loyal to their banks and credit unions with long relationship tenures and provide clear paths to grow them. Yet the banking industry is delivering at a 50-60% level of "very satisfied" on those five areas – leaving the door open for competitors.
- Almost 80% of small businesses use more than one FI for banking services and 41% use three or more. Larger small businesses (100 employees or more) prefer to use a global or national bank as their primary bank while the smallest of small businesses (less than 20 employees) have a wider array of providers, including credit unions and online banks.
- There are four cornerstone products that small businesses buy when they start out, yet as they grow, they often transition to related products or add new ones such as moving from checking to cash management or adding retirement accounts to a payroll product.
- Small businesses are heavy users of the digital channel (both mobile apps and online), while a sizable group do visit branches, at least monthly, for in person meetings such as applying for a business loan and getting financial advice.
- The top five things small businesses want from their primary banking provider are digital tools to manage their accounts, access to resources to help them defend against cyberattacks/fraud, competitive fees, easy access to banking personnel and a wide breadth of products and services.
Why read this report?
This report covers what's important to small businesses in choosing a primary banking provider and how their current providers are performing. It provides insights into the small business banking opportunity.