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4 ways to a deeper banking connection with SMBs

Enriching existing relationships and bringing in new clients requires showing that you are there for them and you have value to add beyond financing.

Sep 29, 2022 / Business Banking

Since the start of the pandemic, businesses have experienced plenty of adversity, and the macroeconomic headwinds aren’t letting up. Yet this presents banks a tremendous opportunity to not only provide capital for companies, but also to stand as a business partner and to cement long-term relationships.

To help small- and middle-market companies navigate both challenges and opportunities, Umpqua conducts an annual survey of these businesses nationwide to understand their mood, mindset and priorities. From this year’s study, it’s clear that businesses are feeling the impacts of various disruptions: 66% are uncertain about the economy, 68% rank inflation as a top-three concern, 56% say they can’t find qualified workers, and 31% aren’t receiving business-critical goods in time.

It’s also clear that businesses aren’t standing still in the midst of all the adversity. Many are working on changing pricing, products and services, even taking on debt to make it happen. This is where banks can really make a difference through deeply understanding their customers and the larger issues impacting their bottom line.

As companies embark on these decisions, we say “Carpe diem”—seize the day. As companies transform themselves to be more resilient and adaptable in today’s uncertain business climate, now is the time banks can stand as advisors and partners, rather than just transaction-focused lenders. Here are some thoughts on how to do that:

Serve as a valuable resource for other experts: Banks serve a wide range of companies across various disciplines, so they can act as a valuable network for their clients for the right experts. Cybersecurity professionals who are customers can be referred to businesses to help them build more controls in their systems. Attorneys can provide key legal counsel on contracts, corporate structure and employment law. Commercial real estate agents can help scout locations for expansion. These referrals can help customers while building good will for the bank.

Encourage automation of repetitive tasks: In our survey, 55% of respondents say they will automate repetitive tasks previously performed by workers. What automation trends do you see among your customers? For example, ecommerce tools can help businesses run a “storefront” 24/7. Some banks use chatbots to alleviate call-center volume, and many businesses can do the same. So-called collaborative robots, or “cobots,” work alongside humans, and are being increasing used on the factory floor. We counsel customers to focus on the low-hanging fruit first, things that they can improve quickly, at a low cost.

Stress the importance of supply chain: Working with businesses to improve supply chain efficiencies is critical, since account receivables and inventory take up so much working capital. Freeing up just a little bit can really help your customers improve cash flow and financing costs. Our survey says 59% of businesses are finding new suppliers, 37% are switching to new products, and 33% are strengthening relationships with suppliers and partners. We see businesses turning to cloud solutions to help manage supply, and even using artificial intelligence to help forecast future demand and anticipate bottlenecks.


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Help them avoid pitfalls: Companies have a lot on their plate, and a lot at stake. Almost six in 10 say they will significantly change pricing models, 45% plan to make significant changes to lines of products and services, and 33% will take on debt to expand the business. While we counsel our customers to be more efficient, we also want them make changes prudently. We coach clients to keep moving, but remind them to do cost-benefit analyses on larger investments. We often see new clients borrow too much too fast, leading to overleveraged balance sheets that hampers future growth, and doesn’t help the bank-client relationship.

All of these recommendations demand a higher level of discipline and nimbleness. This is consistent with the need for businesses to identify ways to become more efficient. Gone are the days of looking at the financials once a month. Some of our businesses are looking at inventories weekly and are managing operations much more closely.

This advice can also apply to banks themselves. Just as businesses need more discipline in this new era, so do banks. Enriching your existing relationships and bringing in new clients requires showing that you are there for them and you have value to add – not only when they need financing, but also as a business partner.

Ashley Hayslip is head of community and business banking at Umpqua Bank.