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Where should banks’ SMB priorities be in 2023?

Offering the right digital tools, personalizing experiences and using data better will help them deliver the level of service that businesses have come to expect.

Jan 5, 2023 / Business Banking

Digitalization, when implemented the right way, is inherently customer-focused, with the ability to solve for speed and accessibility, and to optimize service experiences. It can be difficult, however, for businesses whose customer service model has traditionally revolved around in-person interactions to transition the trust and connection they’ve developed with customers into the digital world.

This has been true for many banks and credit unions that work with small- and medium-sized businesses. Such institutions have traditionally built their brands on in-branch, relationship-based service, where the ‘killer app’ was a firm handshake and a friendly smile.

There are three key priorities financial institutions should focus on in 2023 to implement digital strategies that build on the strength of their customer relationships while offering all the advantages of digital banking:

Rethinking the digital experience: Businesses expect that they should be able to do everything at their banks with the same digital ease they see on consumer-focused platforms. Banking institutions need to move beyond simply implementing digital services. They need to ask customer-oriented questions about their service offerings – from basic considerations like “What should our digital-first model look like?” to more customized questions like “How are we providing service based on who this customer is as a business?”

Business customers expect a great experience from Day One. They expect it to be easy to open new accounts, apply for loans and manage the financial aspects of their business. They expect their financial institution to understand their needs and provide advice on solutions that will address those needs. This expectation remains with the shift to digital, and if financial institutions don’t have the digital solutions in place to meet these needs, business customers are willing to switch to find it.

Leverage data for better client relationships: Banks arguably know their business clients better than any other entity they routinely work with. They have access to all types of business profile information, know what accounts have been opened, where and how money gets spent, how to look for possible fraudulent activity targeting the account, and more. However, this data has traditionally been siloed in systems that exist independently and don’t work holistically.

Banks need to look at how they can aggregate their data and leverage machine learning and analytics to make it actionable. This will help them provide an enhanced service model by offering guidance and suggestions that empower businesses to operate more efficiently.

By looking at the data with a wide lens, banks have the opportunity to tailor a personal and meaningful connection with business clients via technology and digitalization to determine financial solutions that make sense for each business, and that make it easy for businesses to acquire the solutions they need. They can also drive enhanced customer satisfaction and ‘stickiness’ of their relationships.

Go beyond traditional banking: Fintech and financial institution partnerships are growing. To compete in the market, banks and their fintech partners need to bring a solution set to the table that addresses the specific financial needs of each business.

What solutions will best benefit the bank’s target market? After all, solutions that work for a healthcare client won’t necessarily work for a construction client. Partnerships can build differentiation and extend capabilities, enabling banks to go beyond basic services to provide more personalized and comprehensive support systems for their customers.

The economic outlook for 2023 remains in question, but uncertainty can create opportunities.  Business customers are looking to their financial institution to help them through the current economic environment via advice and financial solutions they need. Banks can capitalize on the opportunity by shifting to digital in a meaningful way to provide the efficiency and innovation that business customers need to survive and thrive.

Ultimately, banks need to be willing to eliminate one-size-fits-all approaches to digitalization in 2023 if they want to maintain and expand their commercial business. Selecting the right digital tools, tailoring experiences and more efficiently using data will not only help them attract and retain customers but also achieve the advanced level of service that business owners have come to expect.

Dean Jenkins is VP, product marketing, at Q2