Limping Back From the Pandemic, SMBs Need More Tech From Banks

While no one is emerging from the COVID-19 pandemic unscathed, it’s the small business community — often considered the heartbeat or backbone of the U.S. economy — that has taken a major hit.

An estimated 75% of small and medium-sized businesses (SMBs) saw a loss in revenues, profit margins, and/or sales over the two-year pandemic period that began in March 2020, and over 50% had to upgrade their business models practically overnight just to survive.

The March/April edition of the Digital-First Banking Tracker®, a PYMNTS and NCR collaboration, takes a look at what SMBs and other companies doing business today expect from their financial institutions (FIs).

With retail bank branches closing in record numbers — 38% more in 2021 over 2020 — now is the time for FIs to hone digital-first offerings and leverage opportunities that answer the needs of SMBs. Seamless online capabilities can help legacy banks meet the growing and changing expectations that SMBs now have.

The research shows that more than ever, SMBs want to manage their businesses using digital processes as much as possible. Smaller businesses also need products and services that can be tailored to meet the needs of their own clients. And they need their FIs to operate more as business partners rather than just as banks.

The report shows that it’s more important than ever for FIs to meet the needs of SMBs. A growing number of small business owners indicated they would consider switching from legacy providers to FinTech newcomers. However, 84% of banking customers aren’t planning to expand their level of digital banking functionality post-pandemic.

Technology combined with the personalized roots that community FIs naturally have can add up to big differences when it comes to servicing the needs of SMBs. In this month’s report, Canvas Credit Union explains how it saw success by leveraging processes that complement its own personal touch.

Learn more about the latest trends and developments shaping digital-first banking and what businesses want and expect from their FIs by downloading the Digital-First Banking Tracker®, a PYMNTS and NCR collaboration.