Small and medium businesses (SMBs) offer substantial growth opportunities for retail banks and credit unions, given their significant footprint in the global business landscape. SMBs play a pivotal role in fostering economic activity and employment, contributing to over half of all jobs worldwide. Many are owned by women or minorities, playing a crucial role in these groups' financial independence and inclusion.
SMBs have a transformative influence on their communities
Thriving and profitable SMBs wield a transformative influence on the localities they operate within. Supporting and empowering SMBs through enhanced financial inclusion is a strategic imperative for sustained economic advancement. In collaboration with policymakers, financial institutions (FIs) are well-positioned to play a pivotal role in unlocking the full potential of SMBs, thereby contributing to the overall economic resilience and progress. This underscores the interconnectedness of financial inclusion, economic growth, and job creation, highlighting the profound implications of empowering SMBs within these regions.
And SMBs are banks’ power users, establishing a robust and frequent engagement with financial institutions. Distinguished by their reliance on physical storefronts and substantial cash transactions, SMBs exhibit a distinctive pattern of financial interactions, often necessitating more intensive utilization of financial services than the average consumer.
Special requirements of financial services for SMBs
The operational dynamics of SMBs involve a multitude of financial transactions. These businesses regularly engage in cash-related activities, such as depositing cash at the end of each business day, cashing checks, and managing payroll requirements. And they also often prefer to collect payments in cash due to fees on digital transactions. This high frequency of financial transactions signifies the integral role that FIs play in supporting the day-to-day operations and financial management of SMBs.
Addressing the gap in financial services for SMBs requires a multifaceted approach. FIs need to not only enhance accessibility to loans but also strategically design tools and solutions that resonate with the requirements of SMBs. These requirements include a desire for speed and flexibility instead of waiting in line at the teller, depositing the day’s earnings outside of branch business hours, having deposits immediately credited to their account, deciding on their own how they want to interact with their financial services provider. One way to improve their experience is to utilize the ATM.
Migrating deposits to the ATM and away from the teller is faster and frees branch staff to take care of the important conversations, which SMB owners will appreciate as they may need to provide consultation and have in-depth discussions.
Since ATMs can also be accessed outside of regular branch hours, for example, by installing devices through-the-wall or in a vestibule, they can give SMBs the flexibility to deposit their day’s earnings when they choose to instead of having to close early to make it to the branch in time. The notes are immediately processed and credited to the account by depositing their cash earnings at the ATM. This is an improvement compared to bag deposits and night safes, where the bags are only processed once the branch reopens. Going one step further, with pre-staged transactions in the banking app, SMB owners can even enable trusted staff members to make the deposit and have full visibility in case they cannot make it.
Apart from the benefits regarding financial inclusion and development, migrating SMB cash deposits to the ATM can also benefit FIs: in a cash recycling scenario, these deposits refill your ATM – reducing the number of CIT inventions required at the self-service channel.
Such a simple change in the self-service channel can strongly impact financial institutions’ relationships with their SMB clients and, in turn, improve the economic and social situation in their communities.
With the
cash recyclers of the DN Series®, FIs are well-equipped to enable cash deposits now and switch to cash recycling once the ratio of deposits and withdrawals reaches the point where cash recycling makes sense.
If you’d like to know more about promoting financial inclusion through your activities, visit us
here and download our
Sustainable Banking Guide.
