The small business pain points that spell opportunity for banks
Most small and midsize businesses are satisfied with their primary financial institution, according to a study from the marketing research and consulting firm Phase5. Yet businesses generally don't think of calling their bank or credit union about an array of key operational issues they say they need help with. Here's what bankers can do to capitalize on a wide range of opportunities they are missing out on.
Financial institutions have an opportunity to expand their relationships with small and midsize businesses by advising them on key operational issues where they need help, according to a study by the market research and consulting firm Phase5.
Many of these businesses say they would like to improve in areas such as payment processing and cashflow management, but are unsure where to go for guidance. They often turn to fintechs, accounting platforms and others, in many cases without even thinking of their primary bank or credit union as an option.
One of Phase5’s key findings is that financial institutions must be more proactive about reaching out to business customers to say that they can help in specific areas the study flags as opportunities. Not doing so imperils these relationships, the risk being that businesses increasingly get their needs met elsewhere.
The risk is especially pronounced with businesses that opened in 2020 or later, which the study refers to as the “COVID class.” Phase5 highlights pivotal ways that this group differs from businesses that have been around longer, uncovering insights banks and credit unions can use to make their offerings more compelling.
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