2024 Trends & Predictions: Small Business Banking
- Date:November 07, 2023
- Report Details: 11 pages, 3 graphics
- Research Topic(s):
- Digital Banking
- Small Business
- PAID CONTENT
Overview
Significant transformation is happening in the technological, economic, and competitive landscapes of small-business banking, and 2024 promises to be a pivotal year, with three key trends shaping the industry:
The generative AI revolution kicks off in small-business banking. Sophisticated conversational artificial intelligence models such as ChatGPT have dramatically expanded the capabilities and expectations in financial services, with exciting potential in business banking, where many clients lack internal financial expertise and the resources to compile actionable data and insights. In 2024 and beyond, FIs face a transition from traditional, rules-based AI systems to more generative models. For end users, this shift aims to deliver customized, insight-driven digital experiences that will position the bank as a partner in the success of business clients. Challenges abound, including integration, accuracy, and building trust among business clients.
Economic uncertainty leaves its mark on banking and payments behavior. Inflation, rising interest rates, and fears of a looming recession have created an undercurrent of unease that will affect banking and payments decisions by business owners. This will heighten the need for financial institutions to focus on building trust, serving an advisory role, and offering flexible products and digital services to cater to a potentially more risk-averse small-business clientele.
Credit unions will be a competitive force in the small-business market. Credit unions have largely been absent in the small-business market as a result of regulatory limitations and technological challenges. That’s changing. More credit unions are seeking to diversify their revenue, generate new fee income, and meet the needs of entrepreneurial members who are disgruntled with large-bank offerings. This presents fresh opportunities for digital platform vendors to offer out-of-the-box solutions tailored to their particular needs in small business.
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