Voice of the CFO: Niche Banking Solutions Needed for Small Businesses that Face Same Old Problems

SMBs Seek Niche Banking to Solve Pain Points

When the oven in a pizza shop goes out, the owner must replace it immediately. They can’t wait until their revenues add up to where they can make the purchase.

That’s one of the ways in which the financial needs of small business owners, self-employed workers and freelancers differ from salaried workers.

“These small businesses — especially if you look at the constituency that we serve — their biggest challenge in general is managing cash flows,” Deepesh Jain, chief financial officer (CFO) and chief operating officer at Lili, told PYMNTS. “They have expenses at a certain time, and their revenues come in at a different time.”

Lili serves that constituency with an all-in-one banking app designed for them. Jain joined the company in May with over 20 years of experience in banking and FinTech. In addition to handling the company’s day-to-day financial operations and management, Jain is tasked with leading Lili’s growth into lending and payments.

Small Businesses, Big Pain Points

Speaking as part of PYMNTS’ “Day in the Life of a CFO” series, Jain said that while consumers and medium- to large-sized corporations are well-served by banks and FinTechs, small businesses have some unique pain points that are not solved by those organizations.

For example, a traditional bank would give a small business a bank account but would not give them the opportunity to generate an invoice. So, the business would have to buy an invoice-generation tool. They then would have to figure out how to input their bank account details, how to transfer money between accounts and how to keep track of everything.

Another example of how small businesses are underserved has to do with expenses, Jain said. They can use their debit card at a traditional bank, but the bank will not give them a detailed worksheet that they can use to file their taxes and figure out which expenses are taxable and which are not. Here, too, the small business owner must use other software to transfer their transactions from the bank to the software.

A third example relates to cash flow issues like those faced by the pizza shop owner. Traditional banks charge fees if the customer fails to maintain a minimum balance or has an overdraft.

“As I mentioned before, these small businesses have cash flow issues because of the different timing mismatch,” Jain said. “So, they don’t want to have a minimum balance, they don’t want to pay for the account — they want to have some flexibility about how to manage their overdraft and not pay $29 each time.”

Serving a Growing Demand for Solutions

Lili brings together in one app the ability for small business owners to manage their accounts payable (AP) and accounts receivable (AR). That way, they don’t have to use different tools to do different things, get those tools to talk to each other and move data from here to there.

“We think on average we help small businesses save up to 60 hours and over $1,500 a year in just transitioning from their regular processes to using our app,” Jain said.

Lili also offers a feature that deposits a certain percentage of the small business owner’s revenue into a savings account so that it earns interest. Another, similar feature saves money for the tax returns small businesses must file on a quarterly basis.

“A vast majority of them don’t know that they have to do that if they’re a freelancer or a small business,” Jain said. “So, we have a feature that allows you to automatically set aside a percentage of your incoming revenue as a tax payment, and it goes into a tax bucket that is hidden from you so that you don’t spend it.”

Jain said Lili expects to see growing demand for solutions for small business owners, self-employed workers and freelancers. Jain said by 2028 there will be 90 million freelancers — of which 30 million will be true small business owners who run their lives as a business.

Disney Sees 157 Million Monthly Viewers For Ad-Supported Programming

Disney+

Disney said its three streaming platforms have attracted roughly 157 million monthly active users worldwide.

The entertainment giant announced those figures for Disney+, Hulu and ESPN+ Wednesday (Jan. 8) as part of its presentation at the CES showcase in Las Vegas. The company said that figure includes 112 million domestic users, and is an average per month for the last six months.

“Disney sits at the intersection of world class sports and entertainment content, with the most high-value audiences in ad-supported global streaming at scale,” Rita Ferro, Disney’s president of global advertising, said in a news release. “We wanted to be the first to offer our industry greater transparency into the methodology used to estimate our engaged global ad-supported monthly active users.”

The release noted that — compared to linear advertising — there’s no industry standard for determining the size of the global streaming audience.

Disney said it arrived at its numbers from active accounts across the three services who have watched “ad-supported content” continuously for more than 10 seconds. From there, each account is multiplied by the number of estimated users per account (global average is 2.6 and varies by application and region) to gauge the total number of users.

The release added that multipliers are determined by first-party survey data of more than 13,000 people aged 18 to 64, “representing subscribers in regions with an advertising tier.”

The company’s findings come at a time when consumers are suffering from “streaming fatigue,” as PYMNTS wrote late last month.

“As streaming platforms continue to raise subscription fees, many consumers say they are dissatisfied with the quality of content being offered,” that report said. “Recent surveys, such as TiVo’s 2024 report, suggest satisfaction with both ad-free and ad-supported services has declined, sparking concerns that the golden age of high-quality, original programming might be over.”

In fact, research from PYMNTS Intelligence has shown that cost is the prime factor leading consumers to cancel their streaming services.

Still, things may not be as dire as they seem, with several experts telling PYMNTS that the surveys don’t tell the full story.

For example, industry analyst Dan Rayburn argued that consumer dissatisfaction was a natural part of the trial-and-error process for the streaming landscape.

“If consumers feel that the value isn’t there, they’ll jump from service to service,” he said, adding that streaming platforms don’t share churn rates, and content quality is subjective.

Rayburn cautioned against putting too much stock in survey data, as it often can’t capture the full scope of consumer behavior, such as things like subscriptions and cancellations.