Banks: sink or swim with FinTech players

November 30, 2015
/   Voices

Banking institutions must engage with emerging financial technology (FinTech) companies or risk being left behind by an industry that is currently undergoing one of the largest transformations ever seen.

Winning the Customer

November 27, 2015
/   Spotlight

It’s exhausting just trying to keep pace, let alone stay ahead. Every provider in every business feels the pinch.

Five ways payments will be different in 2024

November 24, 2015
/   Voices

Predicting the future of cash and card payment volumes is arguably a fool’s errand – but Payments UK, Britain’s new trade organisation for the industry, is in a good place to have a go...

Contactless cards: Opt-in or opt-out?

/   Voices

Australia is toying with the idea of creating an opt-in function for contactless cards, in a move that highlights the problems around coping with new payment technology and how fraud risks are handled.

Five EMV lessons for the US

/   Voices

The EMV liability shift has occurred in the US, so what can we expect to see happen in the coming months and years as a result of this change?

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...

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...

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...

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.

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

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...

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...

Traditional business banking services for larger companies have been a profitability mainstay for many financial institutions, but this typically isn’t the case for the small-business segment.

In this diverse group, the profitability challenges include price sensitivity in general and an aversion to fees overall. All of this occurs in an environment where technology takes center stage and business owners may consume retail (for their personal accounts) as well as business services at a given financial institution.

In spite of these challenges, small businesses (which the Small Business Association defines as businesses with fewer than 500 employees) make up a significant customer segment. Some studies estimate that there are 28 million small businesses in the U.S., representing more than $6 trillion in revenue. Those numbers are sure to grow, as surveys suggest that millennials are more likely to avoid traditional 9-to-5 jobs in favor of being entrepreneurs.

In this environment, how can financial institutions serve small businesses more profitably?

Revenue, while a challenge, is a part of the answer, especially for value-added services beyond payments and balance reporting. Those services can include anything from working capital and other types of loans to additional features such as positive pay. The key is to understand the businesses’ needs in order to upsell and cross-sell effectively through targeted marketing and promotions.

However, revenue is just one part of the equation. Cost and efficiency play even more important parts in contributing to the profitability of serving the business segment. This can come from two areas: the efficiency of the back office in serving all customers (including small businesses), and the efficiency of online banking solutions for small businesses. Let’s look at each of those areas separately.

All financial institutions have constraints on the number of employees they can deploy to support their customers. In order to maximize training and knowledge sharing, the ability to offer a single platform across segments provides a way to simplify and leverage operational support. This is especially true for small businesses, which can grow over time and demand additional business services. A platform that can help a financial institution meet those needs, without requiring the staff to learn a new solution with potential language and process differences, can increase operational efficiency.

Hand in hand with back-office efficiency is a solution’s ability to be easy to learn for businesses themselves. This means an efficient workflow coupled with “business lite” terminology, which will allow businesses to be up and running with their solution as quickly as possible. This approach also allows the solution to be more intuitive, which cuts down on the businesses’ own training (for those who will use the system) and makes usage easier for businesses whose activity is more infrequent.

By focusing on a business banking solution that allows both a revenue upside and an efficiency boost, a financial institution can improve the profitability of its small business segment while providing a road map for future growth. In this scenario, both the financial institution and its customers benefit — and that’s the ultimate goal.

About David Potterton: David serves as the Director of  Business Banking at Digital Insight, an NCR company. He has 25 years of financial services industry experience. David has served as a product strategist at JPMorgan Chase, Bank Boston and Wachovia, a well-connected industry analyst and advisor with Cornerstone Advisors, IDC Financial Insights and Meridien Research, and as a financial services technology provider with


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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.

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.

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