Managing cash flow, tapping into data-driven insights and accessing capital: Small businesses are looking to their bank partners to provide digital solutions to streamline access to data, insights and cash. 

This has been “the No. 1 issue that small businesses have faced,” Matt Baker, board adviser at Uplinq, told Bank Automation News. Uplinq is a financial solutions provider for small-business lenders. 

Eighty-five percent of small-business owners believe that investing in the right technology will help prepare them for the future, according to the Small Business Data Report created by tech provider Jack Henry and accounting and bookkeeping solution Autobooks. 

Small-business owners aren’t just managing the sales of products and services, they also must consider backend operations, Lilac Bar David, co-founder and chief executive of small-business banking, accounting and tax platform Lili, told BAN.  

Lili found that business owners are spending at least 10 hours per week managing their finances, Bar David said.  

To keep up with their responsibilities, small-business owners are tapping banks “for digital tools that simplify the way they manage cash flow and their business performance,” Paul Margarites, head of digital channels at TD Bank, told BAN.

SMBs “need all the same tools their banks can provide in a one-on-one meeting — but digitally,” Margarites said. 

To keep up with market demand, banks are launching SMB-specific toolsets for small-business clients. 

Banks, including Citizens, JPMorgan Chase, TD Bank and Grasshopper Bank, are investing in small business toolsets to give clients a competitive edge through digital offerings.  

“While the desire for digital tools can vary, an underlying theme in our research showed customers want more integrations that help improve their efficiency, and they trust the bank to help deliver those,” Margarites said. 

Cash flow management

Cash flow — money in versus money out — is a major pain point for small businesses, Lili’s Bar David said. 

In fact, “60% of small businesses have a problem with, just in general, financial management,” Herman Man, chief product officer at small-business banking product provider Bluevine, told BAN. 

Banks are rolling out cash-flow management solutions designed for SMBs to help fill those gaps. 

More than half of owners of small- and mid-sized businesses view improved insight into company cash flow as a priority, according to Citizens’ 2024 Business Outlook Survey, which queried 600 principals at small- and mid-sized U.S. businesses.  

Banks are working on the following tools to manage cash flow: 

• Citizens’ Cash Flow Forecasting: The tool, launched in May, “can actually show [businesses] how they’re doing versus a set of peers, versus a particular geography and similar-sized companies,” Mark Valentino, president of business banking at Citizens Bank, told BAN. “We think that over time, this is going to become really invaluable.”  Cash Flow Forecasting is built within the bank’s Cash Flow Essentials ecosystem, Valentino said. The bank worked with several third-party vendors and fintech providers to build the solution, he said. Businesses are looking for advice on how to better run their companies, “especially around the topic of cash flow,” he said. 

• TD Bank’s Small Business Dashboard: “The Small Business Dashboard was a result of a partnership with a fintech and TD’s design and development team,” Margarites said. The dashboard uses “financial trend and performance data to help provide business insights.” The dashboard is still in pilot as the bank works to incorporate customer feedback, he said. 

• Bluevine is also exploring cash flow forecasting tools by building out models and testing them, Man said. “Nothing concrete yet, but we’re experimenting across the board.” 

Data-driven insights

SMBs are also looking to banks for data-driven insights, according to JPMorgan Chase’s Chase for Business Survey, which tracks the experiences and needs of 500 small-business owners monthly. 

In fact, 82% of small-business owners said they are likely to use data in their decision-making if it is available, Jameson Troutman, head of product for small business at JPMorgan Chase, previously told BAN.  

Troutman said that to provide meaningful insights to its small-business customers, later this year JPMorgan Chase will launch Customer Insights, a business intelligence platform that helps business owners make data-driven decisions, according to an April JPMorgan Chase release. 

Access to capital

Small businesses need access to capital or they risk failure, according to Jack Henry’s 2024 U.S. Small Business Lending Needs and Trends report. 

The report found that: 

• 82% of small businesses fail because of poor cash flow;  

• 29% of small businesses fail because they run out of cash; and 

• 9% of small businesses received no money after applying for a loan. 

To increase access to capital, Grasshopper Bank launched its digital Small Business Administration (SBA) loan application in April, Stephanie Dunn, president of SBA lending at Grasshopper, previously told BAN.  

Tech providers such as Uplinq aim to improve access to capital for small businesses, specifically those that are traditionally underserved, Uplinq’s Baker told BAN. AI can play a role in removing biases around lending decisions to serve minority-owned businesses.  

“If there’s any way for that to be able to improve small-business lending, and then on top of that, improve small-business lending to the underserved through AI, then that’s going to be an absolute boon for financial institutions,” Baker said. 

SMB innovation pipeline

Financial institutions continue to innovate to meet the needs of small-business clients as those clients lean more than ever on digital offerings. 

Citizens, Grasshopper, TD Bank, JPMorgan Chase and Lili all have additional solutions in the pipeline: 

• Generative AI: Lili is tapping Amazon to offer insights and business advice in real time, Bar David said. 

• Automated underwriting: Grasshopper has an automated underwriting solution and portfolio management solution in its SMB pipeline, Dunn said. 

• Cash flow: Citizens continues to develop cash flow offerings, Valentino said, noting, “We are in the early innings of innovation. … We have a long way to go.” 

With technology in place, small businesses can focus on selling products and services rather than handling the financial aspects of managing a business, Lili’s Bar David said. “It’s easy to start a business, but it’s really hard to scale and grow a business.” 

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