The Battle for the Small Business Customer blog series.

There is a disconnect between financial institutions (FIs) and small businesses. Today, 70 percent of small businesses* – from mom-and-pop stores to small-scale businesses engaged in the gig economy – believe FIs do not understand their needs.

FIs are challenged to serve bespoke products and experiences to SMBs which leaves this space to fintechs and large banks to gain greater traction. Banks and credit unions must begin delivering more tailored solutions and experiences to the table—and begin to differentiate themselves from the pack. As discussed in the first blog in this series, FIs have not developed the segmentation strategy required to reach and win small businesses.

Why is this the case? Because they have been reactive to this underserved market and have not listened to or more deeply researched small business customers or allowed them to help guide product development. It has also been difficult and cost-ineffective to support segmentation via legacy banking technology. 

Know your business customers by asking the right questions. Start internally.

An FI needs to understand its small business customers by asking questions about itself and thoughtfully and honestly answering them. Here are some of the questions to ask:

• Who are our small business customers, and which are the most profitable?
• What are these businesses’ needs?
• How do their needs differ by size or industry?
• Can we provide digital experiences that align with their expectations?

Answering these questions requires an FI-wide effort requiring input and advice from those who know your FI’s account holders and community. Get staff involved to help clarify problems and provide suggestions to remedy them. They will offer valuable insights.

Leverage data and analytics, too

Besides asking the right questions, your FI needs to put data and analytics to work to understand where it is winning and where there are opportunities to expand. Leveraging data and analytics today has a vital purpose in discovering more about each business and providing relevant content and conversations through the digital channel.

The Q2 eBook “The Battle for the Small Business Customer” includes more information about conducting internal assessments and using data and analytics to deliver a fuller understanding of small businesses. Find out why digital technology has unrealized potential to help better segment, target, sell, and serve small businesses.

*Aite Group’s 2019 survey of small businesses 

Download our eBook "The Battle for the Small Business Customer"


Written by Q2