Each month, we curate a list of articles within the financial services industry to help lenders stay on top of key trends in digital transformation and better understand what they mean for their institutions.This month, we gathered four articles that highlight digital transformation in banking.
Four Articles That Highlight Digital Transformation in Business Banking
How Banks Can Take Bank Loan Share from Alternative Business Lenders by Michael Desimone and Cody Putre, The Financial Brand
Historically, lending to small businesses has been a challenge for banks and credit unions due to the “two-pocket problem.” This concept explains the difficulties that come with assessing the credit worthiness of a small business due to the dual roles they play as both business owners and consumers. This problem leads to longer wait times for borrowers as lenders take the time to assess the finances of both the business and borrower. Now, lenders can solve the two-pocket problem with global cash flow analysis. In this article, Numerated’s VP of Financial Products and Chief of Staff share how lenders can accomplish this.
Five Trends to Watch When Considering a Digital Banking Strategy by Jenna McNamee, Insider Intelligence
While banks and credit unions made great progress towards digital transformation throughout the pandemic, there is still a significant amount of work for many to reach digital maturity. This article from Insider Intelligence reviews a recent digital banking report highlighting trends in digital transformation for banks and credit unions. One key takeaway from the report is that financial institutions are finding success in creating strategic partnerships with fintech providers to reach their digital transformation goals quickly and efficiently.
The Future of Commercial Banking by Sandra Horvath, Bank Director
The digital transformation focus in business banking has been significantly slower than consumer lending over the last few years; however there is still time for banks and credit unions to innovate in the small business segment. This article from Bank Director shares how lenders can leverage data to help their borrowers understand their business finances and provide them with the support they need to be successful.
How Banks Can Ward Off Competition for Small-Business Clients by Polo Rocha, American Banker
Today, traditional financial institutions face more competition than ever before for small business customers. Digital-first companies like PayPal, Square, and Chime are now commonly used financial services providers for small businesses. Although many business owners are choosing to use online-only lenders for some services, it’s not too late for traditional financial institutions to innovate their offerings. According to a recent survey of small businesses, the majority of customers that chose to bank with traditional institutions reported that they were very satisfied with the services at their bank. This American Banker article shares how lenders can build on their strengths and compete with alternative lenders to keep their small business clients.