Under Attack: Outsiders threatening traditional business banking models
Community banks and credit unions should be the financial hub for their small-medium business clients. But community institutions are losing large parts of those relationships to non-traditional providers like Quickbooks, PayPal, Xero and others. Traditional banking providers must take decisive action to stop the bleeding, counter the trend, and win back their commercial clients before it’s too late.
Back in the 70s when I was a kid, I remember going to the bank with my mom a couple times a week. She was helping my dad out with his computer repair business, doing the books and collecting payments. I was only six years old, so I didn’t really understand what was going on, but I can recall these visits to the bank with vivid clarity: the smell of mothballs and cleaning products, the neutral fading colors, the itchy chairs, the queuing maze, the hushed sounds… and some genuinely wonderful people.
No matter which branch we went to, the bank’s staff always knew everyone in our family by name. They always greeted us with a warm smile. And of course they never forgot to give those lollipops with the crinkly-wrappers to me and my siblings. They knew us. We trekked to the bank so often that it almost felt like going to grandma’s house. The bank was our “money hub”, the reliable bedrock of our financial life — as it was for millions of small businesses in America.
Not so much anymore. With the rise in digital banking, there are more options than ever for critical financial tools like invoicing, payments, lending, and accounting. As a result, financial institutions risk losing — or, in some cases, have already lost — their position of dominance.
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