Serving Small Businesses in a Digital World
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7 November 2012Jacob Jegher
The small business online banking space is fraught with confusion. Banks are still struggling to understand if their customers should be placed onto consumer online solutions, dedicated small business solutions, or even corporate cash management offerings. Today, the majority of small business online banking users are running on consumer solutions. By definition, this means that small businesses’ needs are not being met. That's just the tip of the iceberg. Last week I published a new report that is all about figuring out how to serve small businesses in a digital world. This is no easy task given the unique state and requirements of this segment. It's also amazing to me how many start-ups have popped up in this space over the last few years. Most are battling it out on their own, going after small businesses directly. A handful are using financial institutions as their distribution channel. It makes a lot of sense for banks to be the go to source for small business financial services. Figuring out what to offer via digital channels is just one of the challenges. There are far bigger issues for banks to tackle before even going down the digital route. Here are a few examples:
- What exactly is a small business and how do we segment our small business customers?
- Where does small business sit in the banking organization? Who is responsible for it? Should it be retail banking, corporate banking, something else?
- What should be done with small businesses who are being treated as consumers (from a product and servicing perspective)?
- What should we be asking small business customers about when we survey them and speak to them? How do we ascertain their needs?