Banks and credit unions must deliver banking platforms tailored to small businesses or risk high attrition rates
WILMINGTON, NC // April 25, 2023 – Apiture, a leading provider of digital banking solutions, today announced the findings of the company’s joint report with Aite-Novarica Group, Delivering Value to Small Businesses, which reveals that nearly half of small businesses (49%) want more sophisticated capabilities than their primary financial institution currently offers.
The survey of more than 1,000 small businesses in the U.S. identified a high risk of customer attrition for financial institutions that do not deliver solutions designed to meet the unique needs of small businesses. To retain their business, 79% of small businesses say it is important, very important, or required for their bank or credit union to provide solutions tailored to them. More sophisticated mobile banking capabilities, digital tools to help manage cash flow, and more robust reporting to lessen dependence on error-prone spreadsheets are some of the desired features identified by survey respondents.
“Small businesses are neither consumers nor corporate clients, and managing finances is often not their forte,” said report author Christine Barry, head of Banking & Payments, Insights & Advisory, Aite-Novarica Group. “Many financial institutions serve this segment with consumer banking platforms that leave small businesses feeling misunderstood with unmet needs. Those willing to implement the right strategies and make the right technology investments will enjoy new successes in this market.”
The report highlights the steps financial institutions should take to better support small businesses, including:
- Deliver user-friendly digital experiences: 26% of all small businesses and 32% of millennial- and Gen Z-run organizations would consider switching financial institutions for a more modern and user-friendly digital experience.
- Integrate with accounting systems: 84% of small businesses state tight integration and auto-syncing with accounting systems are required or important to keep their business.
- Leverage fintech partnerships: 53% of small businesses want their banks and credit unions to partner with more fintech companies.
“This research reinforces the need for financial institutions to deliver a business banking solution built with the specific needs of small businesses in mind,” said Chris Babcock, CEO of Apiture. “Banks and credit unions have a tremendous opportunity to better serve this segment by choosing digital banking solutions that offer the features and intuitive experiences small businesses expect, while also integrating with fintech partners to broaden available capabilities.”
The report is free to download here.
Methodology
This paper is based primarily on the results of a Q1 2023 Aite-Novarica Group online survey of 1,006 U.S.-based small businesses. For the purposes of this paper, “small businesses” are defined as those businesses generating between US$100,000 and US$20 million in annual revenue. While this revenue range extends beyond how some banks or credit unions may define the segment, this revenue range represents a large opportunity for financial institutions. Businesses generating less than US$100,000 in annual revenue have intentionally been left out, as their actions most likely mirror those of consumers. A survey of this size offers a 3-point margin of error at a 95% confidence level; statistical tests of significance among differences were conducted at either the 95% or 90% level of confidence, depending on sample size. This paper’s content also leverages Aite-Novarica Group’s research of banks’ and credit unions’ small-business offerings and strategies, along with the author’s extensive knowledge of the market.
About Apiture
Apiture delivers award-winning digital banking solutions to banks and credit unions throughout the U.S. Our flexible, highly configurable solutions meet a wide range of financial institutions’ needs, from leveling the playing field with larger institutions to supporting growth through innovative data intelligence and embedded banking strategies. With our API-first approach, our clients can maximize the capabilities of their platform while preserving a seamless user experience. Our exclusive focus on digital banking, and a team with hundreds of years of collective experience working at U.S. financial institutions, means we’re dedicated to meeting the unique needs of our clients while providing a level of support that’s unmatched in the industry. Apiture is headquartered in Wilmington, North Carolina, with offices in Austin, Texas. To learn more, visit www.apiture.com.
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