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Revolutionizing Small Business Banking with Financial Wellness Tools

Revolutionizing Small Business Banking with Financial Wellness Tools

01/24/2024
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Revolutionizing Small Business Banking with Financial Wellness Tools

In the dynamic landscape of gig and small businesses, banks have long been seen as pillars of financial support. Traditionally, these financial institutions have offered tools to enhance the financial literacy of their small business customers. However, a crucial aspect has often been overlooked – the provision of tools and technology necessary for the day-to-day operations of these businesses. Once banks and financial institutions include financial education and wellness tools into their digital platform that gigs and small businesses can access, they will truly become the central pillar from which SMEs run their business from. 

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SMBs and Technology

Small business owners are no strangers to hard work. They put in more than 40 hours a week, and yet, a substantial number—27 million to be precise—are sole proprietors with zero employees. Despite their dedication, the average income hovers around $60,000 annually. One of the most notable challenges they face is surrounding the complexities of tax withholdings. If only their primary financial service - their bank - provided sufficient tools that would help them to navigate this area of their finances.

The Predicament of Sole Owners

For the sole traders managing their businesses, the dilemma is real. With the absence of a dedicated team to handle finances, tax withholdings become a critical concern. Gigs and small business owners need a solution that not only simplifies the process but also ensures compliance with tax regulations.

Banking on Innovation

Banks and credit unions are in a unique position to revolutionize the way SMBs manage their finances. Recognizing the pressing need for practical, day-to-day tools, financial institutions can step in to offer technology centered around invoicing, payments, and cash flow forecasting.

Streamlining Tax Withholdings

Consider this: SMBs receive payments regularly, but the challenge lies in determining how much needs to be set aside for tax withholdings. Banks and credit unions can play a pivotal role in simplifying this process. By providing tools that either send alerts or automatically transfer a portion of the received funds into a dedicated tax withholding savings account, financial institutions can ease the burden on small business owners.

Deepening the Relationship: Tools, Technology, and Education

The key to truly making a difference lies in going beyond mere transactions. Banks and credit unions can become partners in the success of SMBs by offering not just the tools and technology but also comprehensive education.

Educational resources can cover a spectrum of topics, from tax planning and compliance to operational efficiency. By empowering SMBs with knowledge, financial institutions can foster a deeper understanding of their unique challenges and provide tailored solutions.

The Path Forward

In conclusion, the future of small business banking lies in a holistic approach. Beyond the traditional role of financial education, banks and credit unions can become enablers of success for SMBs. The integration of user-friendly tools, innovative technology, and targeted education can transform these financial institutions into true partners in the growth journey of small businesses.

As the business landscape evolves, so should the services offered by banks and credit unions. By addressing the immediate needs of SMBs and investing in their long-term success, financial institutions can build lasting relationships and contribute to the prosperity of the small business community.

About Lindsay Hodges | Director of Product Management & Client Success for the Americas

Lindsay is an expert liaison between BankiFi and enterprise partners - a highly skilled professional who excels in collaborating with financial companies to gather product requirements, outline product roadmap prioritization, and communicate technical requirements related to payment and integration services within digital banking platforms.

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