There’s nothing more suitable for technology disruption than traditional small business banking. And there’s no better way to target Millennial entrepreneurs than with the technology they crave to help them in their business pursuits.
More than any other generation, Millennials experience life, work and business through technology and they expect seamless interactions regardless of location. These expectations also extend to financial services. Study after study shows they expect innovative financial solutions to come from tech startups and leading tech companies like Google, Apple and others, rather than financial institutions themselves. In fact, Millennials don’t think very highly of the banking industry as a whole and many of them don’t believe they even need a bank!
Financial institutions are taking notice. As part of its semi-annual small business trends surveys in 2014, Bank of America noted that as Millennials become a force in small business they are embracing tech-based solutions faster than older business owners. And 77 percent of them said that technology makes them feel “more in control.”
Savvy community banks and credit unions can position themselves to cater to this group – by appealing to them as both retail customers and small business customers. Will your financial institution be ready with the small business banking services and channels – especially mobile – that Millennials will expect?
Here are three things to consider:
- Recognize that you might have retail customers who also operate small businesses. Expanding your institution’s appeal to younger generations begins with the idea of banking individuals as they move through the stages of life.
- Offer solutions that can easily scale — from the ‘solopreneur’ all the way up to mid-market companies with multiple employees – on one simple platform. The needs of these groups differ and your solution should be able to grow along with their businesses. A solo entrepreneur, for instance, might give family members access to accounts and make just a few payments a month. As the business grows, the owner might delegate basic permissions to a bookkeeper and “graduate” to use of ACH and wire transfers. A mid-market sized company might have upward of 200 invoices a month and transition to commercial banking and cash management solutions.
- Offer solutions that are very similar to what your customers expect on the retail side – feature-rich, free of business jargon, easy to use and navigate. The goal is to deliver simple tools that allow entrepreneurs to easily manage the financial aspects of their business.
As small businesses multiply, robust opportunities exist to appeal to the growing base of Millennial entrepreneurs. Financial institutions that are poised to offer a simple, rich suite of options to these business customers and members will be well positioned for future growth.
About David Potterton: David Potterton is director, business banking at Digital Insight, an NCR company. He has 25 years of experience developing online cash management, payments and other digital commercial banking solutions.