Community banks and credit unions have a unique opportunity to support small and medium-sized businesses (SMBs) as they face the challenges of digital transformation and cash flow management in an uncertain business environment. With a $150 billion opportunity, these financial institutions can help SMBs survive and succeed.
Doug Brown, Chief Product Officer for Digital Banking at NCR Voyix, highlighted the critical role community banks played during the pandemic, through Paycheck Protection Program (PPP) loans. “They’ve shown they can help businesses navigate tough times,” Brown told Karen Webster. “As we face potential economic downturns, SMBs need trusted partners like community banks.”
Cash Flow Crunch
Research by NCR Voyix and PYMNTS Intelligence found that nearly 75% of SMBs experience cash flow shortages. Furthermore, over 40% of these businesses select their financial institutions based on digital and mobile capabilities, demonstrating the growing importance of tech-driven banking solutions.
Brown pointed out that many SMBs are drawn to third-party platforms like Venmo and Square for payment processing, which can lead to missed opportunities for community banks. “If banks offer integrated payment solutions, they can strengthen relationships and increase deposit accounts.”
However, one of the biggest challenges facing SMBs is the overwhelming range of digital tools available. According to Brown, business owners often get distracted by options that seem simple but fail to address the unique cash flow issues SMBs face.
To truly assist, community banks need to act as advisors, guiding SMBs through the maze of financial technology. “The banker is like a world-class therapist, asking the right questions and providing the right solutions,” Brown said. Real-time data analytics offered by platforms like NCR Voyix help banks understand the pulse of their client’s businesses, leading to timely solutions for credit advances and receivables factoring.
Timely Payments: The Key to SMB Growth
Payment delays remain an issue for SMBs. The PYMNTS Intelligence report found that in Q4 2023, SMBs waited an average of 29.1 days to receive payments, with delays of up to 9.6 days. For small businesses, these late payments can significantly impact operations and growth potential.
Brown emphasized that community banks must do their homework to identify the right products and services for each SMB. “It’s about building trust and creating a virtuous cycle,” he said. By offering personalized advice, community banks can become long-term partners in helping SMBs grow and succeed.
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