Millennial small business owners seek tech-savvy partners

Banks face growing challenges in meeting the needs of small businesses — especially those run by millennials. With this generation quickly becoming the backbone of the small business space, community banks have a major opportunity to tap into this highly influential and rapidly growing market..Capitalizing on this opportunity, however, requires community banks to adapt to the values, tech-savviness and needs that drive millennial entrepreneurs.As digital natives, millennials demand premium digital experiences. They expect their bank to offer an intuitive, mobile-friendly experience that is available 24/7. To attract and retain today’s business owners, community banks need seamless, efficient digital tools to help businesses manage their finances — whether tracking expenses, reviewing transactions, or applying for loans without visiting a branch.With 95 percent of millennial-led small businesses now banking online, and more than 70 percent relying on mobile banking, a strong digital presence is no longer optional; it is essential.Millennials are not only tech-savvy; they are also early tech adopters, with 49 percent of millennial-run businesses embracing new technology immediately after release. Therefore, when community banks introduce new products that clearly demonstrate value, millennial entrepreneurs are likely to adopt them quickly. By meeting these businesses’ expectations for a sleek, tech-driven banking experience, community banks can earn trust and loyalty — turning digital innovation into a major competitive advantage.As banks ramp up their digital banking investments, payments must be a top priority. Offering only credit cards or cash is insufficient. Millennial business owners demand choice and flexibility, employing digital wallets like Apple Pay and Google Pay, peer-to-peer payment solutions, and real-time payment options. If a bank fails to provide modern payment solutions, millennials will go elsewhere.Additionally, because data is the new currency, millennial-run businesses want real-time insights to help them manage their cash flow more effectively. From alerts on late payments to detailed breakdowns of transaction costs and limits, these business owners want ease and transparency. Banks that can provide this level of financial clarity through intuitive data analytics tools will not only meet expectations but set a new standard.Whether managing inventory, payroll or accounting, entrepreneurs juggle many tasks, relying on a mix of digital tools to help streamline and automate their operations. Increasingly, businesses also expect their bank to seamlessly integrate with software they already use.Contrary to common industry belief, small businesses are willing to pay for banking solutions that enhance financial management. Data suggests 73 percent of surveyed millennial business owners would pay for such services. Yet, many community banks are still slow to adapt, helping to push 81 percent of millennial-led businesses to partner directly with nonbank fintech companies to meet their needs.And don’t forget about artificial intelligence. While many bankers still view AI as an emerging component of business banking, investing in the technology now is crucial for staying competitive and meeting current and future customer expectations. Despite concerns about customer-facing AI, millennial-run small businesses are embracing it. Today, 39 percent of millennial-led businesses feel very comfortable with AI in banking, with 25 percent of non-millennial-led businesses also sharing this view.Millennial entrepreneurs are quickly shaping the next chapter of the small business landscape, and community banks have a prime opportunity to play a major role in that future. By embracing modern digital banking capabilities, offering expanded payment options, integrating with the right vendors, and harnessing the power of AI, community banks can build the kind of dynamic, future-forward banking relationships that attract — and retain — millennial business owners.Leslie Chaffer is vice president, product management at Apiture.