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SMB Banking News

Our take on the latest small business banking news.

AmEx has launched a digital checking account for SMBs and issued its first ever debit card as part of the package

High Level:

• "We built the new American Express Business Checking from the ground up because businesses told us they want more from their existing checking account. It's a customer first, full-service digital business checking account that makes cash management easy, processes a range of payment types," said Dean Henry, EVP of global commercial services.?
• Previewed in June, U.S. small and mid-sized businesses can now apply for the new Business Checking account in as little as 10 minutes. The app-only account comes with a debit card for online and in-store purchases and ATM withdrawals.?

Go Deeper:

Read the full article on?Finextra

Why it Matters:

Fintech challengers are keenly aware that small business checking, in conjunction with digital payment acceptance, is the one-two punch that allows them to first attract SMB customers, and secondly disintermediate them from their existing FI relationships. Then by bringing in other cash flow related products to the mix, such as loans, the challenger has essentially replaced the FI by offering very similar products and services, while removing the friction from the onboarding process (in this case, an easy application process that takes as little as ten minutes, according to AmEx).?

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One way for FIs to stay in the SMB financing game is through partnerships with fintechs, says Kabbage co-founder

High Level:

• Regarding fintech partnerships, Kabbage co-founder Kathryn Petralia warns that it's important that the whole company is onboard with the idea. "If a bank wants to make a fintech partnership work, everyone has to be aligned, everyone has to be bought in, and everyone has to have a financial incentive."
• "[It's important to] niche down SMB services, but not too much — adopting a blend of both generalized and specialized services. The trick is remaining focused on the SMB ecosystem and not getting too distracted by extraneous offers."?

Go Deeper:

Read the full article on?Tearsheet.co.

Why it matters:

As fintech challengers continue to broaden their product offerings to encompass more of the functionality that small business owners need, FIs must step up with products that offer a similar value proposition or risk losing market share. By partnering with Autobooks to offer embedded invoicing and payment acceptance as a standard feature of small business checking, an FI can quickly catch up with fintech challengers, while continuing to leverage proximity, personal service, and business expertise as clear differentiators.?

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Several new challenger banks and fintechs now offering personalized services tailored to freelancers

High Level:

• Since the beginning of last year, the US freelance industry has experienced a 700% increase in transaction volume, according to a report from Upwork. Nearly 60M Americans are now freelancers, making up more than one in every three workers. These self-employed individuals have unique banking requirements.?
• Although traditional FIs have been slow to respond to the growing demands of freelancers, a number of challenger banks and fintechs have stepped in recently to offer personalized and services to their needs. Examples include Lili, Oxygen, Novo, Stoovo, and indi.?

Go Deeper:

Read the full article on?Tearsheet.co.

Why it Matters:

The freelancer workforce is clearly booming, and is fast becoming an attractive market to fintech challengers seeking to establish a foothold. Challengers will continue to grow and attract a wider customer base by offering independent workers the solutions they need to make their financial lives easier, then offer banking products to deepen those relationships. To keep up, FIs must begin to offer end-to-end solutions designed to address small business pain points (like cash flow management).?

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Upcoming SMB Events

Live Webinar — Nov. 18 | Understanding the SMB Cash Flow Flywheel

When it comes to customer acquisition, fintech challengers have come to rely on a model that is often talked about, but rarely understood. Until now.?

The flywheel has become a powerful model to describe the growth strategy of many fintech challengers today — and for good reason. Unlike the linear product roadmaps of yesteryear, the flywheel introduces a virtuous circle that prioritizes the journey just as much as the destination. And in the process, uncovers a multitude of entry points for introducing new products while expanding the customer relationship.

Key takeaways you can apply at your own institution:

• What is the product flywheel, and how can it help us better understand small business needs
• Why SMB cashflow management is a natural fit for the flywheel framework, and how payment acceptance is an ideal entry point
• What we can learn from product flywheels outside banking, and how big companies like Starbucks and Chick-fil-A have applied this framework to great success
• How to create your own small business banking flywheel — starting with digital payment acceptance — and how Autobooks can help

Join us on November 18, at 12pm ET / 11am CT.?This webinar is part of the Autobooks monthly thought leadership webinar series.?

Register Now

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DIGITAL BANKING 2021,?presented by American Banker November 15-18

Will you be joining? Watch our on-demand session at the event. In the session, you'll see a live demo of our new Send Invoices and Accept Payments modules. We recently partnered with Jack Henry & Associates to make these new modules standard features of the Banno Digital Banking Platform.?

Learn More

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Free Resources

SMBanking/FORWARD?| Event Videos & Slide Decks

Small business banking is undergoing disruption, but most financial institutions are struggling to keep up with fintech challengers. As businesses have transitioned from in-person to online, fintech challengers have seized this opportunity — and are quickly pushing FIs out of the relationship.

It was against this competitive backdrop that Autobooks hosted its inaugural SMBanking/FORWARD event in early October.

We heard from leading professionals from a wide range of backgrounds — from innovative FIs that are bringing about real change to fintech start-ups at the forefront of digital technology.

To access full sessions, and review some of the insights and recommendations we covered in our two half-day sessions, please visit the?SMBanking/FORWARD resources page.?You’ll find full recordings, as well as the actual slide decks used by the presenters.

Access Event Resources

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Autobooks Guide to ROI

Is your FI ready to increase non-interest fee income and deposits??

Autobooks comes with pre-built integrations to industry leading core, digital banking and merchant processing solutions, making it simple for your FI to transform existing digital banking channels to better serve and monetize small business relationships.

Our new guide includes all the pertinent information your FI needs to make an informed decision:

Part 1: An Introduction to the SMB Market

• SMB Growth Drives New Opportunity
• Addressing a Fundamental Need
• How to Regain Primacy and Drive ROI

Part 2: How to calculate Year 1 ROI with Autobooks

• Calculating the Autobooks Transactional Revenue Opportunity?
• Calculating Monthly Transaction Processing Revenue Per Active SMB?
• Calculating the Active Number of SMBs at and FI at the End of Year 1?
• Monthly Revenue Samples for Retail and Business Account Types
• Adding Monthly Subscription Revenue
• Calculating End of Year 1 Monthly Revenue

Access Now.?

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Making Progress

“First Bank is committed to being the best bank for small businesses, so the decision to add Autobooks was an easy one," said Jenna Williams, SVP, treasury services manager at First Bank. "Everything is extremely accessible from within our online and mobile banking platforms, and it automates a number of otherwise time-consuming, complicated processes for our clients."?

–First Bank

Many brick and mortar small businesses are finding that the loss of daily foot traffic is hitting their business hard. One small business in Pittsboro, North Carolina is breathing new life into their business by transitioning to online to promote their business - particularly social media.

For today’s small business success story, we’re featuring Reclamation Home Furnishings, a business that carries vintage, antique, reclaimed and gently used furniture and home accessories.?They’re using Facebook to post their inventory for sale. When a customer wants to purchase a piece, Reclamation simply sends a payment form link so the customer can easily pay online.??

Not only is this easy for the business, but it helps customers to continue to support the small businesses in their community.?

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Something to Share

Want an easy way to share small business updates with your team? Simply copy the section below, paste into an email, and share with your team.

Did you know?

• Small businesses are accepting digital payments at an accelerating rate, largely fueled by the pandemic (Lee Wetherington).
• Small businesses are a massive customer segment that has been consistently underserved by the banking industry that is more focused on the consumer and commercial banking market segments (Bob Moesta).?
• FIs should strongly consider narrowing their strategy to focus less on the mass market and more on niche market segments (Jason Henrichs).
• Banks must become embedded into the daily workflows of small businesses to compete with emerging digital providers (Ron Shevlin).?

I learned about the changing small business banking market by accessing the free resources found here:?SMBanking/FORWARD resources page. I thought you might be interested in some of the insights found there.

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