Economic conditions have been causing a sense of uncertainty for small businesses for a while. The November 2023 National Federation of Independent Business (NFIB) survey showed optimism at 90.6, which denotes the 23rd consecutive month under the 50-year average of 98. Yet, with the Federal Reserve indicating potential interest rate cuts in 2024 and 2025, businesses may become more hopeful. As these banking customers review their balance sheets and income statements and plan for the future, financial institutions (FIs) will want to support them in the best way possible.
Unfortunately, community and regional financial institutions have been losing small and medium-sized business (SMB) market share. According to Javelin Strategy, these institutions have experienced a 43% drop in their share of primary business banking relationships from 2018 to 2022. The good news is that many SMBs are looking for new FIs. In a recent Cornerstone Advisors survey, 67% of SMBs are somewhat or very likely to search for a new banking relationship in the coming 12 months.
Another NFIB survey revealed some of what SMBs are looking for with their banking institutions. First and foremost, customer service is key. 87% of these businesses stated customer service is very important in choosing a banking institution. The same percentage of businesses value digital offerings—87% said that it is very important or moderately important to have online banking capabilities. FIs that can successfully provide SMB customers with modern online banking coupled with stellar customer service would likely all but ensure that they retain and grow their share of SMBs. Here are three approaches to help your institution do that.
1. Seamless and Prompt Service
SMBs are busy and don’t want to have to wait for customer service. Cutting down on wait times, providing self-service for routine inquiries or basic information, and empowering staff with the right tools to guide SMB customers with context for speedier resolution provides businesses with what they need when they need it, increasing their loyalty.
2. Personalized Digital Banking
Not only do small business owners not have time to wait for answers, but they also need personalized banking. Many are not financial wizards and may not even realize what financial products and services could help their businesses thrive. This is where FIs come in. Setting up appropriate business rules, alerts, and digital routing, combined with data analytics on SMB behavior and preferences, allows FIs to reach out to business account holders when payments may be in jeopardy or if high-value owners are looking for loans. Having this level of personalization will build trust, boost revenue, and increase retention.
3. Real-Time Support
Can your institution provide real-time help when businesses most need it? If business owners need to extend their credit card limit or line of credit amount fairly quickly, they need to know they can rely on their FI. Knowing their business, understanding their plans, and connecting with them in real time, through their channel of choice, will allow you to provide this personal, advisory support to continue to strengthen the relationship and build the customer lifetime value.
Now is the time to boost your pool of SMB customers. They are looking for trustworthy FIs to help guide them through the bumps in the economy with exceptional service and easy-to-use digital offerings. With Glia’s ChannelLess® interaction platform, you can rise to this challenge. Glia’s solution provides you with seamless engagements through all channels to address the specific needs of SMBs. For more information on how to grow your SMB accounts, visit our small business banking web page.
