You’ve got to stay competitive, but you also have to keep processes efficient. Small business owners know too well the “time is money” adage—it means more to those who live off their own livelihood, rather than a larger company with greater margins.
So, where’s the next edge in competition and convenience?
Digital banking provides security, flexibility, and greater freedom to small business owners and their customers. Customers want to pay with apps; one study confirmed that 60 percent of Millennials want to be able to pay for services or goods with their phone. Many traditional banks have already built mobile apps for their services; you may already be familiar with them. Digital banking levels up the digital experience.
What is digital banking?
Traditional banking processes, activities, and functions are all digitized. If you bank with a traditional bank and use their mobile app, they’ve digitized their front-end process on services and products. Digital banks automate the back-end functions, like product development and customer service. Literally every core function of a bank is now digital.
Why are entrepreneurs moving towards digital banks?
Again, mobile banking allows customers to do the activities their familiar with online, like bank transfers, BillPay, and checking account activity. This is still pretty useful to any business owner. Digital banking really shines in these areas for entrepreneurs.
To stay ahead of the curve
We’ve all been there: “Due to insufficient funds, the transfer could not be made”. You may have to pay a late fee, another fee to the bank perhaps, and have the hassle of interrupting a busy day to sit down, log in, and transfer money from another bank account. Or worse–drive directly to a branch.
Digital banks detect when a payment is supposed to be made—and notifies you a week or a similar time period ahead if it looks like you may have insufficient funds when the time for withdrawal comes. You can quickly log into the banking app and transfer money from another bank account. Avoid paying late fees and save significant time.
Reduced costs for banks means savings for SMEs
It’s not uncommon for traditional banks to find ways to make a bit of money (like $.60 charge for every SEPA transfer—looking at you, Deutsche Bank!) or to cut costs. Since all digital banking processes are automated through software, these kinds of banks spend less money.
Better, personalized customer experience
This is where digital banks leave traditional (even online) banking in the dust. Digital banks have the analytics to learn more about their customers—what they’re needs are, their spending habits, etc. Digital banks are careful that this is only used to benefit their customers; they understand that when customers have positive experience, they tend to be more loyal to the bank. Banks like N26, visualize where all your spending is going to, like travel, online shopping, or bill payment. This is a useful visual for business owners who may not understand their spending habits. For SME customers bring twice as much income per head than their traditional peers as digitalization improves their own customers engagement. Revolut gives business owners company cards to team members and allows to track each team’s spending instantly, allows to make limits, and quickly block cards if they are lost.
Saves SME customers money
New York-based Aspiration Bank allows customers to set their own checking account fee, free world-wide ATM withdrawals, and gives 100 times the normal interest rate. Their “Pay What is Fair” business model gives control back to customers. The bank has saved customers over $100 million in fees. Revolut gives out contactless Mastercard with international transfers without transfer fees. Keeping more of your money is always a win.
Digital banking is the next 21st century tool for business owners, allowing them to better manage their team, time, and financial resources.
A solution of making running a business way easier. Hmm…this sounds a bit familiar…
At Shore, we streamline the entire process of managing a business. We handle the daily, so you can focus on the grind.
Popular posts like this:
- Facebook’s Changes Means a Big Win for Small Business Owners: What You Need to Know
- The Most Impactful 21 Habits of Successful Salon Owners
- Instagram Stories for Entrepreneurs: The Ultimate Way to Grow and Connect With Your Audience
- Top Pain Points for Small Businesses
- Six Keys to Launching an Awesome Website