Bringing Digital Banking To SMBs

The movement toward digital financial services can only be as strong as the technology that is implemented to conduct transactions, far and wide, through a variety of channels, including mobile. For some small and mid-sized businesses, embracing digital banking can mean moving beyond mere convenience to embracing a deep and real understanding of how they are truly operating on a day-to-day basis.

One firm, D3 Banking, has just inked a deal with IBERIABANK, based in Louisiana, which allows the latter to provide a cohesive digital banking experience across both desktop and mobile configurations.

In an interview with PYMNTS, Michael Carter, CMO at D3, said that his firm first built its platform to be geared to the consumer, stretching back five years. The key in moving beyond the consumer and embracing SMBs comes as D3’s digital banking services are offered through a single code platform. That allows for uniformity of technology and scale and, nowadays, said Carter, online through tablets and smartphones.

The most obvious advantages, in terms of time and money saved, accrue to SMBs, said Carter. Studies have shown that many small businesses, defined as those with less than $20 million in annual revenues, “do not have access to the financial expertise” that is the hallmark of larger players with significant resources. “In many cases, the finance professional is the owner. There’s not a separate financial professional at the firm,” added Carter.

That, of course, means that day-to-day management of finances using Excel spreadsheets or QuickBooks may prove less than ideal. In fact, Carter pointed to a study done for D3 that showed that as many as 34 percent of small businesses, defined as “lacking financial acumen,” do not have the knowledge in place to prepare financial statements or financial projections in an accurate or timely manner.

To that end, banks can benefit from helping SMBs both manage and triage financial data, said Carter. The platform offered through D3 allows SMBs to access information tied to finances (and through the bank) in graphical form, with any number of representations, such as pie charts, showing where payments have gone and where they are going, that helps give an accurate status on how cash flow is being impacted by both inflows and outflows of funds.

One option through the D3 platform that is especially useful to SMBs, noted Carter, is the ability to populate pro forma financial statements, with income statements, balance sheets and cash flow statements drawn from historical data, and then project them outwards.

Carter said such features have two benefits: They allow firms to see how past behavior can lead to an idea on how future cash may be realized. There’s one login for both business and personal accounts, which indicates that business owners can manage both sides of their financial lives through one interface.

For the banks, the benefit comes through the projections themselves, which can translate to a risk assessment, where once business owners might have come to a would-be lender “with just a checkbook or shoebox full of receipts.” Such standardized financial data and knowledge may quicken the time to loan approval.

The D3 platform also offers money transfers and payments through both credit unions and banks, with account-to-account transfers, which can lead to speedier payments across the supply chain through same-day bill payments.