Small businesses turn to financial advice, data for growth: Citizens survey
Small business owners are seeking more digital and data-driven insights to run their businesses, with nearly 70% prioritizing financial advice and data to grow in the next five years, according to the fourth annual business survey by Citizens published Tuesday.
Small businesses are counting on cash flow management solutions, namely advanced bill payment tools and their performance metrics like how their sales are doing or how their cash flow is working, to make informed decisions, Mark Valentino, head of business banking at Citizens, said.
“Small business customers that tend to lean on cash flow tools now tend to have higher confidence, and they’re focusing on prioritizing financial advice and are data-focused as well,” Valentino said. “I think we’ll see this [trend] continue with generative [artificial intelligence] tools as they continue to come out in the fintech space.”
Though AI has not been integrated into its online banking platform, Citizens is actively exploring potential AI applications for future use and is in the “first inning” of AI adoption in banking, Valentino noted.
However, he pointed out that small businesses will likely benefit from AI-powered solutions from fintech providers to improve operational efficiency.
Mark Valentino, Head of Business Banking at Citizens
Permission granted by Citizens Bank
The Providence, Rhode Island-based lender has been working on the survey data and customer feedback to integrate more tools into its online banking platform and complementary software offerings over the last couple of years, including online bill pay. The lender launched Cash Flow Essentials, a cash management platform almost 18 months ago, specifically for small businesses.
Valentino highlighted that fintechs are pivoting from retail customers and targeting small businesses — a trend that shows both traditional banks and non-bank providers are expanding their small business toolsets to help SMBs navigate some of the economic headwinds that affect their bottom line.
“Now is actually a very opportune time, because between the tariffs and labor issues we’re seeing small business owners trying to figure out how to optimize cash flow and how to run more efficient businesses, so these tools are going to become more and more important to their ecosystem moving forward,” Valentino said.
Nearly 48% of those surveyed said they are adopting new financial management tools this year — five times higher than that of other companies. Meanwhile, 47% said they are leaning more heavily on expert advice from accountants, financial advisors, CPAs, and bankers compared to 6% of other companies.
Amid the current “confusing time” of policy changes and economic uncertainty, small businesses are looking for guidance through digital platforms and human expertise on vendor diversification strategies, cost management techniques, and operational efficiency improvements. They are showing increased interest in lines of credit, business credit cards, and other financial instruments to manage changing cash flow needs, the business banking head explained.
Citizens is trying to create an “omnichannel” experience for businesses of all sizes to ensure customers receive financial advice through multiple channels, including branch locations, which are still widely used by many companies, online platforms, phone-based support and in-person meetings with experienced bankers.
“What we’re seeing customers want is the combination of technology that helps them get insight, coupled with access to people that could provide them with certain answers or help them as well,” Valentino said.
Citizens’ comprehensive digital transformation strategy is focused on small business needs while keeping in mind business transition requisites across generations, as the most significant percentage of small business owners, the baby boomers, prepare to exit their businesses, he said.
“The Great Wealth Transfer expects nearly $124 trillion in generational wealth to be transferred to spouses, children and grandchildren over the next 20 years,” Valentino said. Nearly 42% of small businesses (revenues between $100K and $25 million) plan to transfer ownership in the next five years. Of these, approximately 28% plan to sell or transfer to someone in their family, Valentino noted, citing a Barlow research.
The regional lender’s strategy acknowledges the changing demographics of business ownership and is building digital-first solutions for younger, more tech-savvy business owners taking over existing businesses or launching new ventures.
The roughly $218 billion asset lender positions itself as a leading small business banking provider in the U.S. and is expanding its geographic footprints into new markets like New York, New Jersey, Florida, and, most recently, California by establishing a business banking team in the Southern part of the state. It plans to hire additional bankers, particularly in growth markets, and continue to invest in its online banking platform, according to Valentino.
There are advanced bill pay and online payment tools scheduled for release before year-end, while more payment-focused features are planned for next year. Citizens also plans to announce some major small business-focused digital investments later this year, he noted.
“[Small business] is the backbone of the economy, and we’re going to continue to invest in this business, both in people and technology, in order to help small businesses grow in the United States,” Valentino said.
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