May is National Small Business Month, so now is a great time for financial institutions to shine a well-deserved spotlight on small businesses in their communities. It’s also a great time to attract new-to-bank, small-business clients and the low-cost deposits and strong lending relationships they bring with them.
But how to do that?
Focus on “distinctiveness,” which means being easy to work with, providing superior products and services, and offering expert advice. Specific measures of distinctiveness include providing seamless digital access to financing options with quick approval times; offering flexible financing to meet specific needs, such as being able to borrow on receivables; and providing business intelligence on a company’s industry and competitors.
According to the 2023 Curinos Small Business Survey, national and super-regional banks are the best at this – their higher distinctiveness scores correlate with more reported small-business relationships (see chart).
We encourage smaller regionals and community banks who may be lagging behind in their small-business acquisition goals to develop distinctiveness of their own to better compete against the bigger players. National Small Business Month is a great time to start.
Reported Banking Relationship By “Distinctiveness”
The greater a bank’s distinctiveness score,
the higher its penetration with small businesses.
