‘If banks are only investing in the experience layer but the foundational tech is archaic, we’re going to have a hard time creating integrated experiences’: U.S. Bank’s Scott Beyer 

Most small and mid-sized business (SMB) owners anticipate revenue growth by the end of this year, with concerns about a recession significantly easing. However, they still face a range of challenges.

Two persistent hurdles for SMBs are time constraints and supply chain issues. These challenges often compel business owners and their teams to juggle multiple responsibilities, leaving scant opportunity to engage in the creative and growth-driven aspects that initially fueled their entrepreneurial spirit. Fundamental concerns like securing lines of credit and managing cash flow remain top of mind — draining energy and affecting overall business profitability.

So, what can financial institutions do to provide solutions that ease these burdens, enabling SMBs to focus on expansion while minimizing banking distractions?

During Tearsheet’s The Big Bank Theory Conference held recently in New York City, Scott Beyer, Head of Business Banking Digital Experiences at U.S. Bank, outlined key strategies, with technology as a foundational element, that financial institutions can implement to address these issues.

The Big Ideas

1. Technology is paving the way in addressing the challenges faced by SMBs: Scott notes that a generational change is underway in the SMB landscape, with 77% of small business owners now adopting or planning to adopt technology to enhance their operational efficiency. This trend presents a valuable opportunity for FIs to enter the scene and create engaging digital experiences that resonate with the evolving needs of these businesses.

“I think there are a few elements of that [solutions], but since SMB customers are willing to adopt technology, that’s a start,” says Scott.

2. Make products and services readily accessible: Banks are progressively entering the market with differing degrees of success regarding digital product availability and data accessibility. Although these products are now on offer, the quality of the user experience remains a topic of debate.

Scott highlights that while improving user experience is essential, the primary challenge lies in the foundational technology, which should be the central focus in the transition to digital. Relying on outdated systems could hinder banks’ efforts to deliver a cohesive and integrated digital experience.

“If all we [banks] are doing is investing in the experience layer but the foundational technology is archaic mainframe platforms or databases, we’re really going to have a hard time creating integrated experiences,” notes Scott.

3. Building internal and external system integrations: Banks can evolve from simply providing digital products to enhancing their capabilities through integrations.

“This transition introduces increasing complexity and becomes less sexy for CFOs,” says Scott.

Internal integrations facilitate smoother navigation across platforms, allowing customers to easily transfer funds, make payments, and manage credit cards without multiple logins, simplifying financial management for business owners.

External integrations with data aggregators or payroll systems are also vital, although demonstrating their direct benefits can be tricky for FIs. 

But as these integrations grow in importance, Scott highlights that “they certainly require partnerships and more capital investment.” 

4. Addressing data silos with reconciliation and harmonization strategies: Banks manage a diverse array of fragmented data across various platforms, including CRMs, application portals, servicing systems, and records. But this data often lacks cohesion.

This gap in data integration has created openings for fintech companies, as Scott observes that fintechs are “adept at disintermediating banks in niche areas.”

But banks possess a significant advantage: a wide range of products coupled with established customer trust. Additionally, SMBs prefer to obtain all their solutions from a single financial provider to reduce time and expenses. However, without investing in foundational technology and aligning their data infrastructure, banks may struggle to meet these expectations, according to Scott.

“As we outline our 2025 investments and three-year road maps, it’s advantageous for us as banks to spend more time making a case for foundational investments,” adds Scott.

Listen to the full Session

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