The keys to fighting fraud?

September 8, 2016
/   Insights

We're constantly being warned that fraud is one of the biggest threats facing the banking industry, but the true scale of this was revealed by a recent survey that suggests it could make up...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

It makes perfect sense to celebrate small business. Backbone of the economy, hallmark of innovation, true entrepreneurship, the face of free market capitalism—the clichés come tumbling out with speed and ease, at least in part because they’re completely true. As the reams of statistics compiled and maintained by the Small Business Administration (SBA) make clear, the praise is entirely justified. This entire demographic is always dynamic and vital.

Each year since 1963 the SBA has marshaled resources to observe National Small Business Week, billed as an “opportunity to highlight the impact of outstanding entrepreneurs, small business owners, and others” as they “grow small businesses, create 21st century jobs, drive innovation, and increase America’s global competitiveness.” That was in early May—now, a few weeks past that, can we take a minute to look a little deeper?

Let’s acknowledge first that ‘small business’ is a generic term that covers a vast field, everything from mom-and-pop delis to the latest disruptive force from Silicon Valley. Still, we can ask: Within this diverse market, what’s banking’s role?

Try this: According to “2016 State of Digital Sales In Banking,” a new report from digital platform provider Avoka, most small enterprises seeking business checking, business credit cards or an operating loan will be asked to come into the branch. The study, which encapsulates the findings of a research initiative analyzing the digital sales capabilities of the largest banks in the US, UK and Australia, found that only 17% of 218 business banking products in the 10 largest retail banks in the U.S. can be applied for online. It gets worse: Only 4% of these products are delivered in a mobile-friendly format.

As the report makes clear, some potential problems are obvious: Entrepreneurs would prefer not to waste time waiting for a banker to meet with then, banking hours clash with customer priorities, etc. But there’s a broader issue at stake.

Common sense indicates that many small business startups are now fueled by technological innovation. They use social media for marketing, mobile apps for outreach, and cloud services for routine operations, even if they can’t exactly articulate what the ‘cloud’ is. Yet one of the most fundamental aspects of business, financial services enabled by massive corporations, requires a face-to-face meeting? How is it that we hear constantly about ongoing innovation and massive resources allocated to application development and other technology issues, then read about mandated in-person visits?

Digging a little deeper into one of those fundamental areas, investment, there’s another disconcerting but no less interesting issue that emerges. Do startups looking for finances have to rely on financial services providers, be they banks or VC firms?

The reality is that there are alternatives emerging. Just as guest rooms within apartments compete with hotels courtesy of Airbnb, taxis and limos lose market share to Uber, startups are finding alternative sources for investment support. And of course, a wealth of technology tools and channels makes those options readily available.

Kickstarter is already renowned for serving as a prime support network for fledgling musicians and filmmakers, but it also brings in seed money for a staggering variety of new businesses. And inevitably, there are more specific options like SeedInvest, an equity crowdfunding platform that leads startups to investors, and vice versa. Expect these options to multiply rapidly in the near future.

Of course, besides the conglomerates and crowdfunding, there’s the old standby: the community bank. Research from Harvard’s Kennedy School indicates that more than half of all small business loans come from this sector, making it more vital than ever. But they’re also being squeezed—large corporations are increasingly willing to make smaller loans, non-traditional vendors are making larger loans, and credit unions are, despite some restrictions, becoming more aggressive.

All in all, banking and small business make for a strange and complex picture. The market is vibrant and vital, and that’s good. We all celebrate this sector of the economy, and that’s great. It offers endless opportunities for growth, and that’s the best. Yet almost every corner of the market shows room for improvement, and the sooner those changes are made, the better it will be for everyone.


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.