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For small businesses, it may not be the bank that makes the difference, but the banker.
That was evident in an episode of SMB TV with PYMNTS’ Karen Webster. Ryan GundersonMinnesota-based president excellent fuelWhen Erin WynnDirector of Product Management NCRMore.
Operating in the volatile energy sector (mainly propane), Mr. Gunderson changed banks three times because of his clear belief that small business (SMB) banking relationships were personal. I stayed with the same banker.
“Our relationships with local banks are one of the strongest parts of our business. Our industry is very capital intensive. Our bank relationships are on CapEx. [capital expenditure] Buy tanks and secure supplies. ” His capital requirements changed when energy prices soared.
When Superior Fuel needed an extended line of credit, the company’s bankers made it happen. “What we’re looking at is building a give-and-take relationship,” he said. “We work together and they understand our needs. Sometimes they need to push back and we are happy to listen.”
It was the same a few years ago when energy prices fell to historic lows. In both cases, Gunderson said, “Our prices are always fluctuating, but when you have people who seem to understand that, don’t panic.”
Wynn said SMBs got a taste of this dynamic in 2020 as big banks prioritized offering PPP loans to large customers. This has led to many rethinking his relationship with SMB banks, leading to Community Bank gaining new SMB clients who feel more valued.
“I think they’ve been able to build that kind of relationship. Like Ryan said, they understand that business from that banker’s perspective, so it’s a long way,” she said.
However, “how do you scale that and the service?” [SMBs] I think a lot of banks and credit unions are trying to understand.”
read more: In the digital banking showdown, traditional financial institutions focus on innovation and trust
Banker vs Bank Loyalty
While Superior Fuel still processes the majority of payments by paper check, Gunderson said ACH and tokenized payments could be used to help the company fill gaps in cash flow and streamline accounts receivable. said they are leaning towards specific digital tools and faster payment methods.
Some payments are made through authorize.net and are automatically credited to your account and AR is automatically adjusted. , we need to do more with less.” And banks can’t do it all.
As a supplier, Superior may also offer bank-like services, typically to large industrial customers with their own cash flow challenges. “A lot of the time, we become banks,” he said. “if [clients] If we had these relationships, understood their needs, and worked well with local banks, we wouldn’t have been put in the position of a lender. ”
This is the kind of problem branch banks have traditionally solved, and Wynn says they still do.
“Financial institutions need to think about how to direct support to the right areas. Is it aimed at your personal banker?”
Wynn has observed that over the past few years, credit unions have primarily focused on acquiring community banks as service needs and modes of delivery have changed. “They needed to shift their support model to provide more of that white-glove service to new customers coming from that bank regarding their business needs,” he said.
This underscores Gunderson’s faith in one banker who followed from one financial institution (FI) to another.
“We weren’t loyal to banks. We were loyal to individuals who understood our business,” he said. “Small businesses want that face, someone they can talk to in tough times. Without that relationship, it’s much easier to leave the bank.”
See also Banks turn to technology to stay human in SMB digital banking
face tough times with truth
Wynn and Webster both pointed out a potential problem that small businesses stick to individuals rather than institutions, but it’s loyalty to bankers who act like team members.
“As Ryan used to say, in many other cases, [banks] It’s a commodity and prices have gone up and down, so maybe he didn’t understand his business,” Wynn said. because there is
To show the value of the relationship, Gunderson recalled a year ago when a major generator supplier informed customers that lead times would move from four weeks to nine months. A good fuel would have been to procure and buy every generator you could find, requiring additional capital.
Access to capital allowed the great company to buy $1.5 million worth of generators, profiting from watching cash-strapped competitors go bankrupt.
Still, he is “tense” about the macroeconomic situation in 2023, thinking: It is very difficult and stressful for us when our customers are having trouble paying their bills. ”
Similarly, Wynn said SMB Banking’s strong relationship with third-party FinTech “helps provide tools that make it easier to collect accounts receivable in a variety of ways, in a more automated manner.” Added. [is important]”
This comes with trust and transparency. Gunderson said his bank “looks at our inventory, our accounts receivable. I’ve looked at small business financials and worked out the numbers, so this is important for banks. You’re out of business, You haven’t realized it yet,” because the less involved bank continued to lend “instead of having a very frank conversation.”
How Consumers Pay Online Using Stored Credentials
While some consumers are turning to storing their payment credentials with merchants for convenience, security concerns keep others hesitant. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed her 2,102 US consumers to analyze consumer dilemmas and help merchants overcome holdouts clarified how.
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