SMB’s Need for Digital Banking With Human Touch Gives CUs Competitive Edge vs. FinTechs

For millions of small business owners during the pandemic, it was the credit unions (CUs) and community banks that came to the rescue, through always-on customer service, as well as new products and services tailored to help small- to medium-sized businesses (SMBs) not just survive but thrive.

NCR President Doug Brown told Karen Webster that the human touch, combined with omnichannel offerings, can give community minded financial institutions (FIs) a leg up against the competition when the pandemic is (hopefully) but a memory.

Said Brown: “They know more about the customers’ business than any neobank, any alternative bank, any FinTech.”

Take Paycheck Protection Program (PPP) loans, for example. Billions of dollars had to find their way into SMB coffers through online conduits in times of massive economic stress.

“That was something that no institution thought it could even do,” said Brown.

And yet, community banks and CUs rose to the challenge, logging high customer satisfaction scores as they processed billions of dollars’ worth of loans and took those loans onto their balance sheets.

And at the same time, he said, those CUs and community banks never lost their focus on giving commercial clients the help they needed, through customer call centers, interactive sessions, and a suite of services from transactions to cash management in the back office.

These banks did it all on their own volition, as recent PYMNTS data show that 73% of SMBs said that their banks made changes proactively, reaching out to clients throughout the economic havoc wreaked by COVID-19.

Initially there was a bit of “push” necessary. Businesses had to be encouraged to try something new, especially with digital services. But once they tried these new, tech-enabled offerings, they were hooked, especially in omnichannel settings.

Take the ATM, for example. Conventional wisdom holds that the ATM is just a cash dispensing machine. But Brown noted that the ATM has now become, for consumers and enterprise customers alike, a flexible instrument of video interactions, customer service and, yes, cash (which still has a place in the economy, of course).

Now, with the pandemic receding, SMBs, even as the economy reopens, will keep a significant amount of digital banking activities firmly in place (84% of SMBs have said so). However, about a third of SMBs might be inclined to switch providers depending on what’s being offered. So, said Brown, CUs and community banks must strive continually to make life better for small businesses.

Omnichannel — but Digital Everywhere Too

“It’s better to embrace the digital everywhere approach, rather than eliminate and force people to embrace things they are not ready for,” he said.

That can be done, at least in part, through direct lines of communication between CUs and the community. The operative word is community, said Brown — and the CUs and community banks help their business clients get more fully connected with their communities in times of need.

CUs and community players are planning for these digital behaviors to be firmly entrenched, helping shape the connected economy. Even the government is getting more fully on board, he said, where the Veterans Administration, for example, scheduled 2 million appointments to be held virtually last year, up astronomically from the 20,000 scheduled in the previous year.

“The digital banking trend is here to stay,” said Brown.

Looking ahead at the next digital frontiers, he said, on the front end, there’s an “incredible amount of interest in crypto” from consumers and businesses. NCR’s own banking clients are rushing to understand cryptos and how to embrace them, embedding the digital offerings into their products and services. On the back end, banks are wrestling with workforce management, helping client firms navigate continuing shifts in the work-from-home/hybrid operating models.

As he said, “If you, as a bank, can save this small business an hour of their day, that’s invaluable because they can plow that valuable time and effort back into their operations.”