Five Strategies for Small Business Success — Part 1: Unlocking Growth through Personalization and Payments

Small businesses are essential to local economies, yet many financial institutions struggle to meet their evolving needs. With increasing competition from fintechs and third-party payment providers, banks and credit unions must rethink their approach to small business banking. Recent industry insights highlight five key strategies that can help financial institutions better serve and monetize small business relationships​.

In this two-part blog series, we’ll explore these strategies, starting with personalized experiences and innovative payment capabilities—two critical factors that drive engagement, retention, and revenue growth for financial institutions.

1. Personalized Experiences: The Key to Winning Small Business Loyalty

In today’s digital-first environment, small businesses expect the same level of customization and seamless service they receive from fintech platforms. According to Datos Insights, nearly 50% of small businesses want their financial institution to offer:

• More robust payment features, including international transactions
• Fraud prevention tools, such as positive pay
• Improved cash flow management tools
• More sophisticated mobile banking experiences​

The Challenge

Most banks offer small businesses two inadequate options:

• Consumer banking – Simple but lacks business payment tools
• Commercial banking – Feature-rich but too complex for most small businesses

This forces small businesses to seek alternative solutions—often through third-party fintechs—weakening their relationship with their primary bank​.

The Opportunity

Financial institutions can capture and retain more business customers by integrating small-business-friendly financial tools directly into their digital banking platforms. By embedding Autobooks into online and mobile banking, financial institutions can offer a frictionless banking experience that includes invoicing, online payments, and accounting​.

What Banks Can Do

• Provide an integrated small business dashboard for financial insights
• Offer customized alerts and automation for cash flow monitoring
• Enable self-service options for loan applications and payment management

By focusing on personalization, financial institutions can differentiate themselves from fintech competitors and drive deeper engagement with small business customers.

2. Innovative Payment Capabilities: The Future of Small Business Banking

The way small businesses accept and process payments is rapidly changing. According to Visa’s 2022 Small Business Outlook:

• 73% of small businesses believe digital payments are fundamental to their growth
• 59% plan to go cashless within the next two years​

However, traditional banks are losing ground to fintech providers like Square and PayPal. Third-party apps are capturing valuable deposit relationships and payment processing revenue that banks once controlled. In fact, nearly 80% of small business revenue is at risk of shifting away from banks​.

The Challenge

Many banks and credit unions don’t offer embedded payment solutions inside their business banking platforms. Instead, they require business owners to set up separate merchant services accounts, which are often cumbersome and difficult to manage.

The Opportunity

Financial institutions can reclaim deposits and transaction revenue by offering built-in digital payment solutions. Banks using Autobooks have seen small business deposits increase by 525%, proving that business owners prefer to process payments through their primary bank—if given the right tools​.

What Banks Can Do

• Offer in-app invoicing and payment acceptance
• Enable Tap to Pay on iPhone for easy, in-person transactions
• Provide seamless ACH and card payment options
• Allow quick onboarding for digital payment tools inside online banking

The Bottom Line

Financial institutions that offer simple, built-in payment solutions can compete directly with fintechs, increase transaction volume, and strengthen their small business relationships.

Coming Up in Part 2…

In the second part of this blog series, we’ll explore:

• Partnering with fintechs to enhance banking capabilities
• Tighter integration with accounting systems
• Capturing the full small business relationship

By taking a strategic approach to digital transformation, financial institutions can unlock new revenue opportunities while delivering unmatched value to their small business customers.