Just like consumers, small businesses in Canada are moving away from bank branches and embracing digital tools when it comes to their finances.
To dig more deeply into these trends, Curinos recently surveyed 650 small businesses that have less than $20 million in annual revenue. Among other topics, the online survey asked about banking relationships, attitudes and motivations and product usage and capabilities.
The upshot: Distinctiveness is important in driving consideration and primary relationships, but there’s no one-size-fits-all solution.
The following can help create a successful small-business strategy:
1
Clearly identify the segment(s) the bank seeks to serve and understand the segment needs.
2
Develop a distinctive value proposition with competitive products and services that meet the needs of target segment(s) and market. Promote this value proposition through proactive marketing.
3
Develop a robust credit offering, including appropriate pricing.
4
Develop a sales and service delivery model that effectively aligns customer value with the cost to sell and serve.
5
Accelerate digital and omni-channel solutions to remain competitive amid rapidly changing customer needs and preferences.
The research findings also provide valuable insight into how small businesses currently interact with their financial providers.
As branches become less important, so does location. But experience rules the day.
Attribute Importance
Small businesses are using more financial tools, creating an opportunity for banks to offer them.
Financial Tools Used By Companies
2.7
tools per respondent
on average 2018
3.3
tools per respondent
on average 2022
Source: Curinos Customer Knowledge | 2018 & 2022 Business Banking | 2018 n = 694 | 2022 n = 675
Q 53. Which of the following types of financial tools (e.g. software), if any, does your company use today?
Capturing the primary operating account drives primacy across businesses of all revenue sizes – but especially for small businesses.
Primacy Drivers
To win with owners of small businesses, “easy to work with” is the most important factor for primary bank choice.
2022 Attribute Importance (<$5MM In Annual Revenue)
As a source of funding, business deposits tend to be much less rate sensitive than other consumer and commercial segments.
Commercial Bank Average Portfolio Rate by Segment (Jun ’22)
Based on this research, Curinos has developed individual personas for small businesses, along with the opportunities to provide them with appropriate services and features.
Affordable products and services are “white space” across 88% of population (excludes Guardians)
