Blueprint for a Model Small Business Bank: Pacesetters in Customer Engagement

27 June 2024

Abstract

A confluence of powerful forces are changing the competitive dynamics of small business banking. An attractive market coupled with underserved small businesses and the ability to remedy the situation through technological advances is driving heightened competition. In response, Celent has set out to blueprint a model small business bank and profile best practice pacesetters. In this edition, we focus on customer engagement (post acquisition).

Celent has distilled best practices in customer engagement into three categories: excelling in overall engagement model, delivering efficient financial workflows, and embedding intelligence. While numerous banks are working on improving their engagement model, a minority are extending their value proposition to supporting financial workflows. Nonbanks and fintechs have been setting the bar here. Banks nevertheless have a ripe opportunity for differentiation, in particular through partnerships with fintechs. Embedding intelligence remains a greenfield and with the advent of GenAI will drive game-changing competitive advantage.

Figure 1: The Blueprint

Pacesetters profiled, for overall: American Express, LiveOak Bank, and Starling Bank. For delivering efficient workflows: TD Bank, United Community Banks (the latter two have partnered with Autobooks), Pocketbook, and Square. For embedding intelligence: Eastern Bank (partnered with Monit) and Xero.

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