The Holy Grail of Small Business Banking Is Having Everything on One Platform

There’s a wide gap between the small business solutions traditional banks offer and what today’s small businesses actually need. There may even be a misunderstanding around what defines a small business in 2022. Today’s entrepreneur has complex banking needs that have evolved with the numerous technologies they leverage to run their business.

For small business owners, the holy grail of small business banking is having everything — invoicing, expense tracking, financial reporting, accounting, bookkeeping, and income taxes —in one place.

I’ve personally worked with a lot of small business owners over many years, and I’ve never once heard anyone say they enjoy having to use multiple apps to take care of all their finance needs. But right now, that is their reality.

It would make the most sense for banks to provide all these services. But they need to create the stack of solutions on one platform, and they need to make it flexible and cost-effective.

Innovative platforms like Square and Shopify are quickly filling in where banks are leaving a gap. In truth, traditional banks don’t seem worried about this issue. Currently, they see money flow from those platforms into their own coffers — but that won’t last.

Soon, money flowing into non-traditional banking platforms will stay on those platforms. These apps are looking to grow and provide their customers with all the services they need to run their small businesses, keeping the cash flow within their platforms.

According to research, small business numbers are growing steadily each year, even as the population of the US stagnates. The latest SBA numbers reveal there are 32.5 million small businesses, accounting for 99.9 % of all US businesses!

Banks too often lump all businesses together, but all businesses are not the same and they don’t all need the same services. There is a difference between the financial services needs of a small bakery owner, a design agency, and a real estate agent — even though they’re all small businesses.

Today, a lot of new small businesses are made up of side hustles, freelancing, and gig work. These sole proprietors also require some level of business banking services to keep their personal and business finances separate – uncommingled – but they don’t need all the costly bells and whistles that a small manufacturer with 300 employees and heavy cash flow needs.

New platforms that offer non-traditional banking services are paying attention to this evolution of small business and are working to serve these customers with more flexible and cost-conscious options.

There will come a time when money will stay on these innovative platforms – where it was earned. Banks that don’t find a way to offer more flexibility in their small business services will be left out of a booming economy.

Banks can’t afford to ignore the growing competition in their space, but it’s not yet too late for them. Banks don’t even have to build out proprietary technology stacks — the technology already exists; they just need to recognize the value it would add for their customers.

APIs like Tight seamlessly sit within a bank’s existing platform and provide customers with all the banking services they need in one place. Banks get to provide more value to their customers and better protect the future of their own business.

Banks don’t really have an option. They must change to serve the new economies being created, or risk obsolescence.

If you’re a business owner who isn’t satisfied with the options your bank is offering, or you’re tired of using multiple financial platforms to run your business, let your bank know they can do better. Tell them to reach out to us at Tight. We would love to introduce them to our API and show them how easy it would be to offer their customers that holy grail of small business banking and assure it is an integrated, company-branded experience.