Women, Minority Owners Possess Unique Needs and Demands
The entrepreneurial spirit is alive and well in the U.S. and Canada — and it looks younger and more diverse than ever.
Nearly a decade after the Great Recession crushed the dreams of many would-be entrepreneurs, new business creation has finally ramped up. But it’s not business as usual.
New research from Novantas finds that the post-recession business owners look and behave much differently than their more-established counterparts. They are women, they are minorities, and their companies are based in urban areas.
The owners of these younger companies place different demands on their banks than do other small businesses. That is due, in part, to the vast advancements in technology over the past decade. These entrepreneurs prefer digital channels for increasingly-complex banking tasks, challenging the industry’s traditional relationship-manager model. They also want to get business and financial advice through non-traditional channels.
And just as importantly, they see few distinctions between banks.
Novantas’ 2018 Business Banking research relies on data collected from more than 3,100 business-banking decision makers in the U.S. and Canada. It underscores the need for banks to create products and services to meet these new demands. If they don’t, they risk disruption from nimbler fintech competitors and other new entrants who are eager to serve the same segment.
This report outlines three key conclusions that Novantas believes banks must address to appeal to, acquire and retain such small-business customers into the future. First, acquiring customers in younger, emerging segments requires meaningful differentiation from other banks and financial-services providers. Second, the current relationship manager model is outdated and must be re-imagined to meet the needs of younger businesses. Finally, marketing is a critical lever for banks, but strategies must be tailored to behaviors and preferences of younger, emerging companies.
VP, Head of Customer Knowledge, Chicago
Managing Director, Chicago
Director, New York
Executive Vice President, New York
Director, New York