As per the U.S. Small Business Administration, May 2-5 is officially Small Business Week. The SBA has scheduled a virtual summit as well as a slew of local events to celebrate entrepreneurship. But when you come right down to it, there’s one pressing need for any small business, and that’s how to pay and get paid. So, we’d like to tease this upcoming week by focusing on small business banking. Even more specifically, that focus increasingly lands on digital banking. Bottomline has a specific platform that banks can extend to small business clients, as well as fintech partners who specialize in meeting the specific needs of small businesses. One partner is Autobooks, and recently our chief product and innovation officer for banking Curt Raffi had a series of conversations with Autobooks marketing VP Derik Sutton about trends in the category as well as the workings of the cooperation between our two companies. What follows are hyperlinks to all five videos in the series with an abstract of the conversations with Sutton.
The SMB Shift: Small and Micro Businesses are Up for Grabs from Fintechs: The shift in micro and small business banking is unlike any other shift that's been seen in this market so far. That category of banking is most likely to be disintermediated from traditional banking. Consumer banking and commercial banking are largely supplanted with financial institutions that aren’t going anywhere. But when it comes to micro and small business banking, fintechs are addressing the single most important need for any business. That’s the need to increasingly shift from getting paid in person from cash or check, to accepting a digital payment, whether that be online, or directly through an app.
Defining the SMB Segment: It’s Really About Workflows: The reality is that small businesses behave differently than large commercial clients. What banks need to do is consider the workflow of the small business customer. For example, they need to ask, “how many of my customers have the same workflow needed to digitally request payment from an end user?” It considers that the small business customer wants to be able to click on a link, execute a payment online, and have those funds flow right back into their account. And a landscaper, painter, architect, or self-employed lawyer probably has a very different need around getting paid than a large oil and gas company with a complex ERP system and teams of people in the accounting department. So, we need to ask bankers the question, “what are the workflows of the business customers you want to satisfy?” Ultimately, banks need to consider how what they offer to the smallest businesses fits into their pay and get paid workflows.
Bottomline and Autobooks: What the Partnership Means to You: Our integration with Bottomline is going to be really compelling because what we enable is available directly through the digital banking channel. We're going to enable businesses to go online and request access to this tool. When that happens, Bottomline captures and gives us this great amount of information that we can pre-populate for a business owner so we can start underwriting that experience directly in app. We take that process of installation out of the equation and reduce that to minutes, including underwriting compliance, and KYC and AML checks. Once approved, the business can send that digital invoice or go right back into the digital banking interface. We hear use cases of financial institutions saying, “hey, we launched your solution. And within 22 minutes of launching the app for the first time we had a business owner come in, enroll for the service, send an invoice and get paid by their customer.” That's the type of workflow that a business owner wants.
Flexibility is Key: How Autobooks is Changing How Businesses Pay and Get Paid: We've built an accounting, bookkeeping and financial record keeping system that starts with the workflow of getting paid. Over time, what we recognized is most businesses care way more about getting paid than they do about keeping their books. And so, we broke those features out so that we could make them available explicitly and exclusively. If we can enable more businesses to get paid through the app, we can then also nudge them towards better financial management. So, upgrade your experience into accounting then into financial record keeping and then into bookkeeping services, and you can basically make that decision to take those steps. We're there for them. And they can start to automate the books, pay the monthly fee, get revenue, etc.
Getting Started with Autobooks: A Simple Setup: What we’ve done is make the service available to banks. Our teams are doing the hard work to take on all the integration requirements and do all the things that we need to do to power the service so that we can make it more or less like a click of a button for a financial institution that wants to make it available. In addition to that, we're also surrounding that with go-to-market capabilities, and training capabilities, so when you're thinking about this project plan as a financial institution, we understand it's more than just enabling a service in the back-office tool and having the app pop up. If you really want to make your customers aware of it and you want to make your frontline team feel confident, you need to build a project plan around training your team and marketing to your customers. We help with all that as well.