From guidance to tools: why banks are ideally placed to help small businesses succeed online

Banks and small businesses have always had a close relationship.

In the past, heading into a bank branch was one of the first steps on the road to business ownership, whether that was to open a business account, take out a loan or just to ask for financial advice on running a business.

Today that relationship looks very different.

Small business owners are no longer just looking for accounts and loans and commercial property. They’re also often looking for payment gateways and card readers, as well as a much broader range of advice on running a business. They’re looking to set up websites and e-commerce stores, and to begin marketing their brand online.

And given the role banks and building societies have always played in helping small business owners get set up, there’s no reason why they can’t offer the entire package. As we’ll see, it’s a more natural next step than it might first appear.

Banks have always been a guide, but they can be more

Small business owners say they want banks to offer more advice to help them with setting up and running their business.

While the obvious fit here is financial advice, many banks and building societies are answering the need by offering guidance on other aspects of small business ownership. For example, Lloyds Bank and Natwest both have extensive information hubs for small business customers, via the Lloyds Resource Centre and NatWest’s Business Builder digital content library.

Those resources aren’t limited to business finance – they also include practical guides on how to get set up as a small business owner, including how to create your first website.

If banks already offer guidance that helps small business owners start selling online, there’s no reason why they can’t offer the other part of the equation: the digital tools to start selling online.

It’s simply bridging the gap between two things: the guidance that’s on offer, and the tools that allow small business owners to put their knowledge into action.

It’s what small business owners want

So banks can help close the transacting loop for small businesses – giving small business owners the power to sell online by packaging store builders with business accounts and payment gateways.

It’s a natural fit from the perspective of small business owners. One recent McKinsey study advised that banks have the opportunity to become a one-stop-shop for commercial tools. When it comes to getting hold of commercial enablement tools, the majority of small businesses want to get them from a single provider.

The reason for that is simple: small business owners are incredibly busy people, and the time it takes to shop around different providers is one of the biggest barriers to them adopting new digital tools.

People don’t think of banking as banking anymore

This shift also plays into the bigger picture of what banking itself is becoming. Today, people rarely think of “banking services” as something you can only get from a traditional bank. Often financial products are thought of as an app or a platform, like Monzo or Revolut – or even a non-financial platform like a super app that’s powered by BaaS or embedded finance.

As a result, customers are moving away from thinking “I need banking services, therefore I need a bank”. Instead they’re looking for whatever app, platform or provider will let them do what they need to do.

For small business owners, that means they’re not necessarily looking for a business bank account or business loans first. They’re looking for a way to turn their hobby into a business or to start selling online – and the more pieces of that puzzle a bank can offer, the more attractive and sticky  they’ll become to small business customers.

Banks are set to become small business champions

Linking up small businesses with the digital tools they need to set up and thrive doesn’t just change the appeal of a bank’s business offering. It also changes the way banks can position themselves – moving them from just a provider of financial products and towards being a small business champion first and foremost.

How that looks might vary for different banks. It might take the form of a referral programme, offering co-branded tools with full first line support taken care of by your partner. Or it might involve integrating and offering fully-branded white label products, and creating a one-stop service for small business owners to get everything they need to thrive

For instance, BaseKit’s white label tools can plug into your existing payment gateway, so you can offer not just payment functionality, but a full e-commerce solution that’s ready to roll.

We’re on a mission for tech democracy for small businesses.

Request a demo of our software, or get in touch to discuss what a BaseKit partnership could look like.