With SMBs representing 44% of US GDP and half of all employment, banks are scrambling to attract and retain this important customer base, competing not only with other banks but with the rising group of fintechs that are offering easy onboarding, mobile payment acceptance and more. Many mid-size banks are looking for ways to offer tech + trust to their customers as recent upheaval in banking is shining a spotlight on the importance of trusting your financial institution. Pollinate, a merchant services platform for banks, recently conducted a survey of US banking executives to identify how banks are working to attract and retain SMBs amidst the competition from other banks and fintechs
NEW YORK, Sept. 19, 2023 /PRNewswire-PRWeb/ -- SMBs represent 44 percent of US GDP and close to half of all employment1. Whereas once banks competed amongst themselves for this crucial market, now they also find themselves competing against nimble fintech businesses and Silicon Valley.
Pollinate, a digital experience platform focused on integrating merchant acquiring into banks, today unveils results from its second annual survey of US banking executives and reveals how banks are working to attract and retain SMBs amidst the competition from other banks and fintechs.
Over the past decade, changing behavior and the rapid evolvement of technology has caused banks to lose market share, particularly to digital payment providers. Pollinate's research shows a degree of anxiety on the part of the banking sector, notably when it comes to competition for the increasingly important SMB market. With SMBs making up just under half of US bank customers, more than 60% of respondents stated they fear losing SMB market share to tech giants or payment providers. As a result, banks have significantly increased their budgets to attract and retain these customers.
"The challenge of how to respond to tech disruption and digital first competitors is one felt by many industries, and banking is no exception. Up until recently, banks have been reacting to that challenge, rather than tackling the problem with proactive strategies," said Fiona Roach Canning, CEO of Pollinate. "However, the results of our survey show that many banks are now seeing the unique position they have in the financial ecosystem and how they can use that position to simplify the lives of their SMB customers and deliver valuable services beyond tech and finance."
Survey findings include:
- Budgets for attracting and retaining SMBs are growing as the importance of this group continues to grow, competition increases and profit margins improve
- Banks clearly see the challenge in the market from tech-fist competitors in a variety of areas, including business advice.
- Combining intelligent and integrated experiences and data driven solutions with a great customer experience is recognized as the biggest potential 'win' for banks serving SMBs: retaining customer primacy and brand recognition, and enabling the next generation of products and services to be built
- 40% of respondents want to create a single customer view for SMB customers, reducing the cognitive burden for business owners
- Banks are however offering more digital services to their SMB customers with significant increases since the last survey in those offerings, for example, business management tools such as website builders (up from 39 to 47 percent), data-led customer insights (up from 37 to 46 percent) and marketing platforms (up from 34 to 40 percent).
- 45 percent of those surveyed see building a platform for wider business management as being "extremely important" for SMB customers, up from 39 percent in the last survey.
- While it's early days, awareness of the potential that banking platforms have has grown significantly since the last survey in 2022. 11 percent of respondents see creating an SMB and retail customer ecosystem as a key part of winning SMB customers, up from two percent. Likewise, 46 percent of those surveyed have an SMB strategy built around serving customers through a single hub, up from 38 percent. This awareness is likely to continue to grow in surveys to come as banks resume their role at the vital intersection of business and finance.
Pollinate surveyed 200 banking executives from across the US to gauge sentiment around the challenge posed to the banking sector by digital payments providers and fintechs. Research was conducted in Q2 2023 with Coleman Parkes.
To download a free copy please visit https://resources.pollinate.global/bank-to-the-future
To find out more about Pollinate visit www.pollinate.global
About Pollinate:
Pollinate is a global fintech leader founded in 2017, specializing in innovative technology that enables our bank partners to redefine the way they interact with small and medium sized businesses. We collaborate with leading banks worldwide to transform the SMB customer experience, putting them at the heart of these crucial relationships and making payments an intelligent and integrated part of a wider SMB banking proposition. Our investors include Insight Partners, NatWest, National Australia Bank, Fiserv, and Mastercard.
- McKinsey Analysis 2023
Media Contact
Media Relations, Pollinate, 1 6463517404, [email protected], https://www.pollinate.global/us/
SOURCE Pollinate
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