Jack Henry introduced Banno Business, a cloud-native business banking solution aimed at enhancing the offerings for small and medium-sized business customers of credit unions and community banks. It merges business functionalities such as cash management with embedded payment solutions, cash flow tools, and reporting.
Financial institutions are seeing the benefits of supporting SMBs, as they’re the backbone of the U.S. economy. With 33.2 million small businesses in America, 63% were attributed to job creation from 1995 to 2021. What Jack Henry hopes to achieve is give SMBs the tools they need to scale their operations, in addition to expanding and monetizing their market share.
With Banno Business, SMBs can also link any external accounts to their banks through an integration with Finicity, a Mastercard company.
SMB Pain Points
SMBs grapple with unique challenges, primarily limited access to capital for growth and daily operations due to factors like high interest rates, lack of a solid credit history, and complex loan processes.
Erratic revenue streams and unforeseen expenses make cash flow management challenging, often resulting in late payments and the need to borrow money.
Economic downturns, increased fraud, and the need to adopt the latest cutting-edge technology to remain competitive adds further strain. As a result, many SMBs struggle to stay afloat.
Where FI Are Missing the Mark with SMBs
Some SMBs are not happy with their financial institution’s offerings and would consider leaving. This isn’t unexpected as SMBs already struggle with daily operations and lack the bandwidth to tackle other essential tasks such as managing payment inflows and outflows. Consequently, they resort to juggling multiple tools simultaneously to manage everything from customer payments to supplier transactions.
There are still businesses that are considered undigitized, where invoices increasingly pile up. In fact, according to a survey from Fiserv, 56% of small business owners said that cash flow and invoice payment management are an “ongoing pain point.”
The best solution integrates multiple tasks into an intuitive platform. For instance, automated invoice management and integrated payment processing streamline operations for SMBs. FIs provide these solutions to SMB clients, but it would be up to them to determine and understand the unique pain points and needs of SMBs first.