In their December 2020 report entitled, "Reinventing Small Business Banking Part I", Celent (a leading advisory firm focused on tech for financial institutions) leverages an important Phase 5 study to analyze the landscape and make actionable recommendations for their audience.
It's clear that writer Alenka Grealish has done her homework on the subject. The 58 page report draws on multiple credible sources to paint a picture of exactly what is at stake as customers change and challengers enter the market. Using Phase 5 survey data, she shows that banks' COVID-19 responses have received "mixed reviews" from small business customers, and how up to $62 billion in revenues is currently "at risk".
From there, she dedicates the entire next section to the importance of understanding the customer, and suggests applying a "design thinking approach" when developing your strategy to meet customer needs. Her comment, "digitalization is not the end all be all" may be surprising to some, but leads into a compelling explanation of how and why customer insights should guide strategy and investment. As the Phase 5 data shows, there are certain situations where small business customers prefer high touch customer service as opposed to self-serve online options. As a bank, it's important to know which is which before making a heavy investment into an app, capability, site, etc..
Grealish goes on to describe what the future of small business banking could look like, and shares ideas for how to get there. She explores the concept of "embedded finance", and profiles seven different potential bank partners who might facilitate the journey to point-of-arrival, including Autobooks, Jack Henry, Bill.com, MineralTree, FIS, 9Spokes and Upswot.
For more information about the Celent report, click here.