The findings: Twenty-three percent of US small and medium-sized businesses (SMBs) currently use local banks or credit unions, and 15% say they’re “highly likely” to switch to a local financial institution (FI) in the next few years, per a September 2024 i2c and PYMNTS Intelligence survey.
Community banks and credit unions can take advantage of the SMB growth opportunity by providing more of what these businesses are looking for.
Why the switch? Key motivators that SMBs cite for finding a new provider include:
These factors may weigh even more heavily for SMBs in rural areas, who can be more isolated from national branches than their urban counterparts.
What’s preventing some from choosing local FIs? According to the study:
Our take: A few big banks are making strides in offering the types of digital features SMBs have been asking for, but none currently offers it all.
Smaller FIs looking to win SMB business should prioritize offering these features and develop targeted marketing campaigns around them.
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