How banks can meet small business needs

A common topic at the annual Bank Customer Experience Summit focuses on how customers are rethinking how and why they do their banking. The same applies to small businesses, which are the most likely to be impacted by both economic forces and the liquidity of banks.

According to a Goldman Sachs survey, more than 75% of small businesses are concerned about access to credit, especially as many rely on smaller banks, which may feel more of a credit squeeze than larger banks.

There is also the issue of personalization, as many small businesses feel as if their needs are not understood or appreciated by banks.

"Small businesses want their bank to really understand their business," Josephine Moran, president and CEO of Ledyard National Bank, said in an email interview. "They want personalization, both in one on one interaction and in digitization. Ease of banking and convenience is extremely important, whether its banking transactions or applying for a loan."

How can banks help small businesses with lending and cash flow while also delivering individualized experiences? To answer this question, ATM Marketplace reached out to Brett Sussman, vice president, Business Blueprint and Banking at American Express, in an email interview.

Q.Small businesses often feel disconnected or underserved from traditional banks. Why do you think this is the case?

A. There's a stereotype that traditional banks typically lack the customer service or speed to provide personalized, quick service to a small business. This can be challenging for customers who are more likely to require additional guidance and support — especially as they navigate lending and cash flow management. In fact, in our recent surveying, we found nearly half (48%) of small businesses believe customer service is the most important factor when considering new banking partners. They also reported speed and efficiency as the second most important factors (38%).

We're thrilled to be changing that stereotype through a connected, efficient cash flow management suite of products with our historic quality customer service. American Express Business Blueprint is a dashboard designed to help small businesses manage their cash flow and view their business products and accounts all in one place for more efficient cash flow management. Small businesses can apply for the growth-focused products that match their business' needs — a business line of credit and a business checking, plus free cash flow analytics.

Q. What can banks do to correct this issue?

A. In our inaugural Small Business Financial Confidence Report, we found 32% of small business owners surveyed wish they had more guidance on cash flow and 31% and want more guidance on managing expenses. Banks can help small businesses by providing greater education, efficiency, and customer service. In response to this desire for greater guidance, we created My Insights, a free cash flow data analytics tool to help small businesses make more confident financial decisions with personalized data about their business.

Q. What are some of the most practical banking tools that can help small businesses be successful?

A.Small businesses should shop around based off their business needs but there are a variety of financial tools at their disposal. For example, a business line of credit can be helpful for businesses who need ongoing access to funding, typically with flexible terms which gives the business owner greater control over how much they borrow, when they need it, and for how long they need to pay it back.

Q. Do you see fintech tools as being particularly beneficial?

A. Fintech solutions have helped expedite the processes within financial services, such as applying for funding, and expanding access to tools historically difficult to attain by America's smallest small businesses. American Express saw an opportunity to expand its services to small businesses, providing them more products to help run their business. In 2020, we acquired Fintech company, Kabbage. Since that acquisition, we've since launched flexible lines of credit for U.S. small businesses, American Express's first digital business checking account, and more, all of which allow our customers to help run their business with innovative, digital solutions that employ best-in-class fintech innovations while maintaining the powerful backing of American Express.

Q. Anything else you'd like to add?

A. Small businesses are growth-minded and are ready to take the necessary steps to scale their businesses. One of the new trends we're seeing is 41% of all small businesses are currently prioritizing artificial intelligence to help make business decisions with 59% not using AI today. When asked why they are not using AI, mistrust in the technology was the largest factor and has grown over the past few months.

In our newest Small Business Financial Confidence Report, we found the interest in AI has increased over the last two months, as now 25% of small businesses surveyed who are not currently prioritizing AI would consider utilizing it in the future compared to 20% in our last report. While interest in AI has increased since the first report, there has also been an increase in mistrust for the technology. Between reports, there was a 39% increase in mistrust of AI among small businesses who are not considering using it in the future.

The topic of small businesses and banking will be covered during an informative panel at the Bank Customer Experience Summit, held jointly with the Interactive Customer Experience Summit from Sept. 11 to 13 in Charlotte, North Carolina. The summit will gather executives from banks, retailers, restaurants and more to discuss customer experience trends across verticals and will feature a jointly held Elevate/BCX Awards ceremony to honor innovators in customer experience. Click here to register for the joint event. Use the code AMCEDIT20 at checkout for 20% off registration. Online registration closes on Sept. 8.