Small and medium-sized businesses (SMBs) are the backbone of the economy. They create jobs, drive innovation, and contribute significantly to GDP growth. However, SMBs often lack the resources and expertise of larger businesses. This is where banks can step in and provide valuable support.

There is a recent and growing trend of big banks launching and promoting financial tools specifically designed for SMBs. This is a positive development, as it shows that banks are recognizing the importance of this customer segment.

Here are some of the key reasons why big banks are investing in SMB tools:

• Increased profitability: SMBs are a highly profitable customer segment for banks. By providing them with the tools they need to succeed, banks can grow their SMB customer base and increase their bottom line
• Improved customer satisfaction: SMBs that have access to the right financial tools are more likely to be satisfied with their bank. This can lead to increased customer loyalty and retention
• Enhanced customer relationships: By providing SMBs with financial tools and resources, banks can build stronger relationships with their customers. This can lead to increased cross-selling opportunities and a more profitable relationship overall

Some examples of recent announcements from big banks include:

• Citizens Bank launched a new cash flow forecasting solution as part of its Cash Flow Essentials suite. This tool helps businesses forecast their cash flow up to 12 months in advance, which can help them make better financial decisions
• JPMorgan Chase launched a business intelligence platform called Customer Insights. This platform helps businesses understand their customers better by providing data on their demographics, purchasing habits, and how they compare to similar businesses. This information can be used to improve marketing, sales, and overall business operations
• Recently, TD Bank added a Small Business Dashboard for all US-based businesses. According to Tear Sheet, “this AI-enabled solution allows clients to identify trends within their business, helping SMBs to plan and make informed investments”

These are just a few examples of how big banks are investing in SMB tools. This trend is likely to continue in the coming years, as banks look for new ways to serve this important and profitable customer segment.

What does this mean for other banks?

If you are a bank that does not currently offer value-added financial tools to SMBs, now is the time to start thinking about it. There are only so many levers a bank can pull with commoditized deposit and loan products, so tools like those mentioned above will be increasingly important to delighting business customers, while winning and growing market share.

If you’re interested to learn more, Monit’s team of former bankers would be happy to speak with you! Book a demo or send us an email!

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