The research evaluates the competitor landscape and presents a new competitor set for incumbent banks to consider. It uncovers how SMB owners view the services available to them and reveals what they really want from their service provider, using the Jobs to be Done (JTBD) framework.
Conducted over several months the findings are based on 1023 quantitative interviews with US small businesses with up to 20 employees, and 12 in-depth qualitative interviews with business owners across nine states.
The research discovered:
- Current bank offerings aren’t working: 62% don’t believe their business banking offers any additional benefits compared with their personal accounts.
- Banks are not just competing with other banks: only half (51%) of SMBs use one of the top five banks, while over two thirds also use one of the top six business platforms.
- The 11 opportunities to serve: of the 11 Jobs the research identified, the most important are: managing cash flow, protecting personal assets from the business’s finances, and making smarter and proactive decisions based on financial data.
- New platforms are supporting crucial Jobs: Stripe, PayPal, QuickBooks and Shopify are helping SMBs with their financial JTBD. They are also truly digital so their response to the recent pandemic has been swift.
- New services won’t win just by solving JTBD: services need to connect with customers on a deeper emotional and cultural level – SMBs expect a service as personalised as the one they provide to their own customers.
- The impact of COVID–19: people expect a new level of care and support – providers will need to do more than just support SMBs’ finances, acting as a proactive partner in helping them grow.
“SMBs are the US economy, accounting for 98% of all businesses. They’re run by talented, passionate and determined people but when it comes to finances we discovered they are simply not getting what they need,” explained Ryan Garner, JTBD lead at 11:FS. “The products banks offer – accounts, loans and credit cards – have not moved on and don’t help owners in crucial areas such as cash flow management, and making more informed decisions based on their data. “
Sam Maule, managing partner – North America, at 11:FS, added: “There is a huge opportunity for banks and fintech firms to rethink SMB financial services for the digital world. A big part of the solution is shifting away from cookie cutter, commodity products towards digital services that meet the unique and diverse requirements of SMBs. With the significant service gaps we’ve identified in the research, doing so could see those propositions win significant market share.”
The full report can be downloaded here.