Bankers Upgrade Cash Flow Management Features to Keep Small Business Customers

The banking industry is undergoing a pandemic-fueled digital transformation that is reshaping how businesses of all sizes operate. The global health crisis forced companies to embrace digital channels in record numbers. Although lockdowns have ended and many people have returned to the office, the embrace of digital solutions persists. This is especially true for small- to medium-sized businesses (SMBs). Online capabilities and digital tools are often essential to SMBs’ day-to-day needs, with uses ranging from cash management to sales.

The digital shift is disrupting relationships between SMBs and their financial institutions (FIs). Businesses are increasingly turning to financial services partners that can provide these tools, and FinTechs and neobanks are well-positioned to do so. To maintain customer loyalty and stay competitive, FIs must adapt their offerings to meet SMBs’ digital needs.

In this month’s Next-Gen Commercial Banking Tracker®, PYMNTS examines the digital needs of SMBs and how FIs can enhance customer loyalty by addressing them.

Around the Next-Gen Commercial Banking Space

A recent report from Mastercard reveals widespread and heavy use of FinTech solutions among small business owners. According to Mastercard’s findings, 95% of small business owners are heavy FinTech users in both their business and personal lives. The report found that banking was the most common FinTech use case in business, with 66% of owners leveraging FinTechs to bank. They also used FinTech solutions for budgeting and forecasting and payroll management.

Small businesses are finding great success using digital tools, yet the process is not always easy. For example, cloud-based enterprise resource planning (ERP) platforms are proving to be particularly troublesome. A recent survey found that ERP projects took six months longer than the retailer expected and frequently cost more than anticipated. Integration issues were the biggest source of ERP difficulties.

For more on these stories, visit the Tracker’s News and Trends section.

TD Bank on Meeting SMBs’ Digital Needs

SMBs have been embracing digital tools for years, but then the pandemic hit, causing acceleration of digitization in order for SMBs to continue operating. As SMBs embrace more digital tools and move more business procedures online, FIs are stepping in to help.

In this month’s feature story, Paul Margarites, head of commercial digital platforms at TD Bank, talks about how SMBs’ digital needs should be met by placing integration front and center.

PYMNTS Intelligence: SMBs Turn Toward Banks Offering Digital Solutions

The good news for FIs looking to strengthen their SMB relationships is that the demand for financial services and solutions is high. From updating payment capabilities to overhauling back-office procedures, SMBs need help modernizing business operations. The bad news is that SMBs are open to switching financial services providers to get the services they need, and they have many options to switch to. The corporate banking landscape is crowded with FinTechs, neobanks and even traditional banks ready to capitalize on businesses’ unmet digital needs.

This month’s PYMNTS Intelligence takes a look at the digital solutions and services sought by SMBs and how FIs can compete with FinTechs to provide these services and keep customers’ loyalty.

About the Tracker

The Next-Gen Commercial Banking Tracker®, a PYMNTS and FISPAN collaboration, examines how banks can secure SMB loyalty in a digital-first world, and how offering digital tools is crucial to meet SMBs’ needs while staying competitive in the banking space.