Going Beyond Lending to Succeed in Small Business Lending
A couple of weeks ago I attended American Banker’s Small Business Banking conference. It remains one of my favorite conferences because the focus is always so intense on how to take small business lending to the next stage. The conversations this year were no less focused, but the one trend I saw that was different this year was that this small business lending conference seemed to have more conversations about how we can make the life of the small business owner easier versus what we can do for the lender.
All I can say is, ‘YES!’. We finally have realized that nothing is going to happen without an engaged, optimistic, and energetic small business owner driving demand for small business lending. Let me share a few items that really excited me and hopefully can inspire your approach to small business lending.
Digital Versus Personal
What does a digital strategy mean to you? I get afraid when I hear institutions say that they are digitizing their loan application and not making the process cleaner instead (just only a little less paper-based). Sharon Miller, from Bank of America’s Small Business banking group said it best, “The digital experience is only complementary to what we do—we are a people business”. So ask yourself, what is the reason(s) behind your digital plans? If it is simply creating the form and not changing the process, it is time to re-plan.
Being in the Market
One bank shared their data of the visit destination of their customers: branch versus call center versus online banking services. The ratio was a staggering 1 (branch) to 2 (call center) to 24 (web access)! This simply reflects that small business owners are extremely leveraged for time and want to bank on their terms. Utilizing solutions like Baker Hill NextGen Online Loan Application allows any small business owner to apply for the loan when and where they want to. Because of that, every banker needs to be in the market and utilizing mobile tools to meet and discuss opportunities at the locations of the small business—not at the branch.
The Small Business Owner Is It
Nothing happens in small business without the small business owner. So successful banks will be the ones that create an ecosystem that supports the small business owner not only in getting the small business loan, but also in making every aspect of the small business owner’s life easier. For example, Square, Inc. approves nearly 90% of their merchant services requests from small business and then gives them the ability to do self-boarding as well. This would explain why nearly every new business I walk into has a Square Register or Square Reader. Those banks that can make the life of the small business owner easier will be the champions, literally, of the small business arena.
So focus on the small business owner, be available wherever that small business owner is, be current with a strong digital presence, and you and your small business customers will be set for success.
Posted on Monday, December 18, 2017 at 8:00 AM
by Mike Horrocks
With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction.
As the Vice-President of Product Management at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University.
Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation.
Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.