The Untapped Big Revenue Opportunity: Winning the Battle for Business Deposits

The financial industry’s premier M&A event kicked off on Sunday, January 29th with a wide variety of panels and sessions addressing the state of the industry, shifts in technology and more. During the afternoon breakout sessions, Chris Tremont, Chief Digital Officer joined Nikhil Lakhanpal, Co-Founder of Narmi and Taylor Cembalisty, General Manager of Narmi to discuss the battle for business deposits and how banks can balance their KYC and KYB compliance requirements while still providing a first-class digital experience. 

Key takeaways from the panel include:

• Community & regional banks are uniquely positioned to win. Bureaucratic processes often inhibit risk taking, stifle creativity and hinder an organization’s ability to effectively communicate with its customers, which is why smaller financial institutions have the most potential to win business deposits. Today’s business owners are skilled and tech savvy, so communication, personalization, and versatility are crucial in winning them over. 
• Tech-driven innovation drives business deposits. Competitive advantage comes from innovation, and by embracing new technologies, financial institutions can differentiate itself in a crowded marketplace. Investments in digital business banking experiences have lagged behind, which is why banks like Grasshopper seek out partnerships with industry-leading fintechs to offer better tools and resources to help small- and medium-sized businesses (SMBs) manage their finances and stay on top of cash flow.
• You don’t have to sacrifice quality service. Keeping customers regularly updated and informed on the latest product releases and/or enhancements goes a long way. By pursuing fintech partnerships, leveraging technology and establishing best practices, financial institutions can protect their digital platform and their customers without diminishing quality service or convenience.

The Story of How Grasshopper Bank and Radius Bank Redefined Banking Innovation

On the final day of AOBA, attendees had the opportunity to gain valuable insights on various approaches to banking, customer engagement and digital strategies, as well as leave with actionable steps to accelerate growth. During the general session on Tuesday, January 31st, our President & CEO Mike Butler sat down with Nikhil Lakhanpal, Co-Founder of Narmi to break down how he led a digital-first change across an entire organization, obstacles he faced and the resulting transformative impact. 

Key takeaways from the session include: 

• It starts with client experience. Many financial institutions think in terms of product, but digital banks like Grasshopper think in terms of experience. A lot of companies may say that, but you have to be committed. In order for a new digital experience to improve profitability, you need to improve customer service, which leads to higher levels of retention.
• People are key. Great people create great companies, and the people make the company more than technology does. It’s more about the culture and people running the product, which requires openness, especially in the partnership realm. You cannot build a lasting product/experience if you are repeatedly being pulled in a different direction. Companies need leaders, not just technology. 
• You have to have a digital mindset. Everyone is accustomed to an Amazon-like experience. Whether or not you want to have a branch, why not give your customers a self service kiosk with industry experts there to help when they need it.

To discover what events our team will be attending this year, check out our events calendar.

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One of the most intriguing elements of the conference was the session titled, “Why The Real Threat For Banks is Complacency,” where Chris Tremont, Chief Digital Officer participated as a panelist and shared valuable insight about the bank-fintech partnership model and SMB revolution.

“What we’ve seen within the SMB market is banks just haven’t kept up with it. So how do we solve that problem?” said Tremont. “Every bank’s strategy is different, but for over a decade now, we have believed in the bank-fintech partnership model and have seen it work. Both by working with fintechs on the B2B side to improve our own direct offerings, as well as partnering with fintechs on the indirect side (BaaS) to help profitably grow the bank’s balance sheet.”

As companies face a growing list of challenges that increasingly require digital solutions, business owners need better tools to run their operations and credit when the time is right, which means banks have the opportunity to step up and help them accomplish both. “Everyday, more Gen Z and Millennials are becoming business owners, and they’re sitting there wondering why it’s so hard to run a business when it doesn’t have to be,” Tremont explained.

“People want a different way to access money, and they want it easier. To do that, you have to have the right technology,” confirmed Chris Dean, Chief Executive Officer and Co-Founder of Treasury Prime. “Smart banks recognize this.”

The program concluded with advice from each panelist on what banks and fintechs need to hear from each other. “If a fintech is going to work with a bank, consider the cultural connection, have respect for the regulatory environment and take compliance seriously,” Tremont offered. “Remember that there are costs to running a bank and agreements need to be a win-win on both sides. If you’re getting an offer that seems really inexpensive, make sure to look twice because you may get what you pay for.”

At Grasshopper Bank we understand that business banking is not a one-size-fits-all approach and needs are always changing, which is why we are committed to continuously launching and enhancing our products and services to provide the best possible user experience. If you’re a small business searching for innovative digital solutions, apply now or contact us to find out how our offerings can fit your needs. If you’re a fintech looking to build on our platform or offer a financial application that can improve our customer’s lives, we encourage you to reach out.

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