As SMBs veer away from traditional brick-and-mortar branches, what will traditional banks do?
- Despite the digital banking boom, traditional banks like JPMorgan are charting a different path, planning to open new branches in the coming years.
- SMBs, on the other hand, are positioning to transition away from traditional brick-and-mortar branches and toward platforms with a stronger digital focus.
Despite the challenges, small businesses are pushing forward. Recent data shows a collective 25% uptick in median revenue over the last 18 months for these businesses, reflecting their optimism for the future. However, this doesn’t discount the fact that SMBs still confront their fair share of challenges.
Financial management remains a key challenge for small businesses, whether it involves accessing capital for growth or optimizing banking procedures to save time and costs.
A recent report by Bluevine reveals that 34% of small businesses report spending over a week’s worth of work hours annually at local branches to manage their banking activities. As a result of prolonged durations and unmet needs, roughly one-third (32%) of SMBs have previously switched their primary business banks.
While several factors drive small business owners to switch from traditional branch-based banking to entirely digital offerings, time and transparency emerge as the most significant. Almost half of the key areas where SMBs aim to save time in 2024 are in banking and finance. “Time savings from digital banking is a huge value proposition for our [SMB] customers,” said Bluevine CEO Eyal Lifshitz. “And when I talk about transparency, I am not only referencing straightforward terms on fees for various banking activities, which are critically important but also the holistic view business owners have of their financials.”
