Community banks were already planning for a digital payments transformation, but the shift in spending habits during the coronavirus quarantine caused many community banks to accelerate, or prioritize, that transformation, particularly when it comes to supporting hard-hit small businesses—81 percent of which consider robust digital banking capabilities to be important.
Since the start of the pandemic, 76 percent of small- and mid-size businesses have seen a decrease in cashflow further highlighting the need for a quick and efficient means to collect payments and receive loan distributions. In 2019, ICBA Bancard, in conjunction with Aite Group, launched the ICBA Bancard Digital Payments Strategy Guide—Consumer Edition to help banks determine where they are in their path to developing a consumer digital strategy.
This year, the same team developed a companion guide to help community banks assess their small business payments readiness. The ICBA Bancard Digital Payments Strategy Guide—Small Business Edition launched exclusively for ICBA Bancard clients in early September and became available for all ICBA member banks on November 9.
The guide explores the importance of developing a digital payments strategy for small businesses (those earning less than $10 million in annual revenue) separate from a bank’s retail customers. It is important for community banks to distinguish between consumer and small business digital banking platforms because small business payment capabilities are often constrained when they transact on a platform built for consumers. The Small Business Guide provides an overview of digital payments and outlines the key components of a successful digital payments strategy to address their unique needs.
The 30-page guide is supplemented with a Digital Payments Maturity Assessment Tool—Small Business Edition that measures the maturity of a bank’s small business digital strategy. Respondents answer a series of probing questions regarding current digital payments offerings and plans for future strategic development.
The Assessment Tool scores banks into one of four maturity results: Developing, Emerging, Strategic, or Market Leading. Each result is accompanied by a document that provides a descriptive summary and guidance to help community banks achieve the next level of maturity and capture the small business market within their community.
Rebecca Kruse is executive vice president of operations at ICBA Bancard.