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Digital Banking

Chasing (and Catching) Deposits: How Business Banking Tools Create an Edge

Angel Shortt & Joe Givigliano II
Jun 24, 2024

Growing and replacing deposits is a top priority for U.S. banks and credit unions: 72% of bank CEOs and 44% of credit union CEOs say growing deposits is paramount.

And with the average balance of business accounts more than twice that of retail accounts, it’s no surprise that more and more financial institutions are looking to bolster their business banking services in that search for low-cost deposits.

It's a challenging quest: your business bankers compete fiercely with rivals, all courting the same businesses to win or retain relationships. Many businesses see financial services as a commodity, undifferentiated except by price.

The most successful business bankers, however, focus on helping their business banking clients succeed. They don’t lead with a product or rate but take the time to truly understand the needs of those businesses. These goals, aspirations, and challenges provide a roadmap for business bankers, who – armed with the right technology, products, and tools – can then enable the success of those businesses, winning deposits and relationships.

Getting the Tools Right

With over 33 million businesses of all sizes operating in the U.S., how do you identify the right tools and technologies?

The key lies in a suite of business banking technologies that complement each other, providing the right tools at the right time. The bulk of U.S. businesses – 99%, in fact – fall into the small-to-midsize business (SMB) category. These businesses have diverse financial needs that change as they grow. What they don’t need is unnecessary complexity or complication, which takes valuable time away from running and growing their organization and creates frustration.

Your business banking technology needs to be scalable to meet businesses where they are, not forcing them into a “one size fits all” solution. That’s why Jack Henry’s Banno Business™ solution was engineered for flexibility and growth.

Built on the retail banking platform, Banno Business makes it easy for microbusinesses to accept payments and invoice digitally, offering a familiar, intuitive interface. As businesses grow, more advanced functionality can be turned on with the swipe of a toggle. ACH, wires, and even fraud reduction capabilities through Positive Pay can be enabled. An entitlements layer allows businesses to designate financial functions to employees or contractors when the time is right for the business.

Eventually, many businesses grow to need advanced financial capabilities or process payments or receipts in volumes that challenge an SMB-focused interface. That’s where treasury management solutions, like JHA Treasury Management™, come into play.

How Do You Know If You Need Treasury Management?

Treasury management solutions are designed for heavy volume, advanced financial needs.

With an interface that prioritizes easy processing for bulk transactions, offers extended entitlements and financial capabilities, and connects intuitively with a corporation’s AP/AR and payroll systems, treasury management systems may only be needed by a small percentage of a community bank’s customers … but those businesses couldn’t bank there otherwise.

“We don’t have enough corporate business clients to justify the purchase of Treasury Management,” said a banker at a recent Silverlake™ user group meeting. There were nods all around the table until one person shook his head.

He said, “If you build it, they will come.”

This reflects a crucial point: without treasury management technology already in place, you simply can’t win the commercial banking clients that require advanced functionality. No matter how attractive your product offerings or rates are, those lucrative operating accounts will remain at institutions that can fulfill their needs.

Winning Business Deposits Through Digital Technology

If you’re serious about serving the business banking market to generate substantial commercial deposits, you need to work towards removing the stigma that community financial institutions can’t handle business banking needs.

Consider this three-pronged approach:

  1. Understand your target market.
  2. Implement complementary business banking technologies.
  3. Be willing to play the long game.

To understand your target market, get specific about which businesses you want to serve.

Are you looking to fulfill a particular niche, serve as a business banking generalist within your geographical footprint, or use your digital services to capture commercial clients nationwide? Your choice, and your success, will depend on your goals and vision.

Consider the implementation of complementary technologies that empower you to offer everything from cash management solutions to treasury management services.

Businesses have different needs as they scale, and a one-size-fits-all approach to business banking is as ineffective as one-size-fits-all clothing. A scalable solution like Banno Business can provide the right fit as a business grows, while a handoff to JHA Treasury Management provides the advanced experience a commercial enterprise needs. Together, they offer the technology needed to capture new relationships and deposits across the business spectrum.

Finally, be willing to play the long game.

If you’re serious about growing your commercial banking portfolio and have identified a target market that needs advanced financial capabilities, invest in the right technologies.

Don’t write off a treasury management system like JHA Treasury Management. Its pricing flexes with the number of businesses using the system, making it easier to get started.

 Catching Deposits

Catching business deposits doesn’t need to feel like a frustrating game of chase, where everyone’s running after a few targets.

If you focus on how your organization can help businesses succeed – and have the technology and tools to make that vision a reality – relationships and deposits will follow.

To learn more about using complementary digital technologies like Banno Business or JHA Treasury Management, just contact us. We’ll be in touch.

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