Why Smart Banks Are Becoming Growth Engines for Small Business

Open Banking Beyond Data Sharing

Q: How has open banking influenced how businesses handle cash flow and manage relationships?

STUCKEY: Yeah, there are so many different and exciting elements of open banking. If we use it from the perspective of how we can ensure that the data a business owns at its bank can be shared with other providers outside the banking universe.

You mentioned PayPal, that’s a perfect example – but many, many others leverage the power of different aggregators that are out in the space. And those aggregators, we partner with aggregators here at FIS to be able to send via API that banking data out to all of those partners.

And the reason that we do that is that we want to make sure that the end business user knows that we respect their data, that’s their data, and that we want to be able to provide it to them wherever they need it the most. So, from that perspective, open banking is critical.

Q: What’s the next evolution beyond just sharing banking data with accounting systems?

STUCKEY: I mentioned previously, too, the importance of connectivity between banks and ERP and accounting systems. That’s one of the most obvious places where open banking data is shared between the two. And there’s even a next step in the evolution of that, which is where we start enabling our bank’s customers to initiate payments from within the accounting platform itself.

So, that becomes the next step of, first it’s data sharing, and then it’s pushing out functionality that the bank would normally have within its own four walls, its own four virtual walls out to those partners as well.

When Personal and Business Banking Collide

Q: How do you see banks permitting businesses to combine retail and business banking relationships into a unified perspective?

STUCKEY: It’s a critical area to be able to address nowadays. You’re absolutely right. One of the things we’ve noticed, particularly with smaller businesses, is that there’s more intermingling of business and personal finances.

And the way that we’ve attempted to solve that, and we see many banks do the same thing, is we offer a product which is a combination of both consumer and small business that allows the user to go in and toggle back and forth between their personal and business accounts right there from within the same experience.

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And a part of that toggling also gives them the personal capabilities they would normally have in their personal banking, and when they toggle over to the small business side, they get a set of business capabilities as well.

Now, these are really tailored more towards small businesses because that’s where intermingling occurs.

So, if you have a business that’s growing out of that, now they’re putting more space between anything personal and business from an account perspective. We’ll usually migrate them to another platform that’s more of a pure-play business platform.

The Fintech Partnership Transformation

Q: How has the competitive landscape between fintechs and traditional banking impacted innovation in business banking?

STUCKEY: Absolutely. There’s been a big shift there. Historically, in the banking space, they have liked to draw a line between themselves and third-party fintech services. Let’s say we at FIS partnered with a fintech and wanted to provide that service to a bank. We would usually obscure the fintech; it would be sold as a white-label product, and we would hide the fintech’s name completely.

There’s now a shift, where banks want to present to their businesses and show openness and a willingness to partner with those fintechs, because a lot of the time those fintechs have their own brand name.

So, nowadays, it’s not as taboo as it was in the past to, for example, partner with a third-party fintech like Autobooks, which provides digital invoicing and payment acceptance, and allow Autobooks’ brand name to show up right there when it’s offered as a service within the bank as well. So, that’s a big change.

AI’s Careful Entry into Business Banking

Q: What role do you envision AI and machine learning playing in shaping the future of cash management and business relationships?

STUCKEY: Yeah, AI is such an interesting topic, right? Because we all know how much promise it holds. In the banking space, it’s particularly interesting because it’s a regulated space, and so there’s more caution that you have to take on certain aspects of it.

Where we’ve seen AI start to take hold first is more in the bank support space: how do you leverage AI to provide call center teams with information behind the scenes to answer business end users’ questions better?

However, where I’m starting to see that go from there is particularly in insights. So, providing insights to businesses is critical. That’s particularly true for small businesses. I mentioned earlier that banks are really looking for ways to let small businesses self-serve.

And that comes along with providing them insights. And those insights might be to help them understand what’s going on with their cash flow. It could be using AI to help them better understand how they spend money compared to peers in their space.

And so, using AI in that way as a way for us to deliver power to small businesses that makes them feel that their bank is helping them grow, without having to have heavy phone one-on-one touch calls with that small business.

Q: How is the regulatory environment influencing AI adoption in business banking?

STUCKEY: The regulatory environment is really interesting to me. We’ve seen a few things there. We’ve seen this shift back and forth between the importance of deposits versus lending. A couple of years ago, when we had a crisis with people withdrawing their money from banks, and Silicon Valley Bank and others were struggling.

There were then some reactions to that in the regulatory space that now have people focused much more on deposits. Whereas in the past they may have been more focused on lending, today they’re focused on deposits.

But we’ve seen a couple of other interesting regulatory spaces. One of the areas that, two to three years ago, was absolutely at the very top of trends was the ability to use APIs to push banking services outside the bank.