With business customers of all sizes demanding frictionless experiences from their lenders, banks are having to rethink their business banking operations.

From large corporations to startups and bricks and mortar stores, companies are looking to banks for products and services that help ease the way they do business.  

To meet that demand, banks are turning to fintechs and even input from the public to reinvent their services. 

“Whether you are a mid–corporate or commercial client, or you are a consumer, you want your experiences with your bank to be as frictionless as your experiences with all the brands that you actually interact with,” said Lamont Young, head of digital at Citizens Financial Group. 

Just as online shopping and mobile apps have transformed how people interact with businesses, businesses themselves want their operations to benefit from the same conveniences brought on by technology, including with their banking relationships.  

Business’ Needs in Flux  

Small business owners are looking to community banks to bring more convenience to banking, said Joe Campanelli, CEO of Needham Bank. He has seen a resurgence of small businesses in recent years, and each one might have different needs and expectations from the bank.  

One challenge is having the resources to listen to each business owner and address unique needs, Campanelli said. Needham Bank will build new products as well as partner with fintechs if their products meet their customers’ needs.  

To address the needs of Millennial business owners, Needham Bank also works with Babson College to better understand what they might expect from banking relationships. Campanelli said the bank has also brought in younger workers to ensure the employee base has different perspectives. 

Chris Tremont, executive vice president of virtual banking, said Boston-based Radius Bank decided several years ago to partner with fintechs to improve their customers’ experiences. The digital bank also provides a white label platform for fintechs to develop their own products, and this year partnered with California-based Brex to help the fintech roll out a new business banking product.  

Wellesley native Michael Tannenbaum is the chief financial officer for Brex. He said the new banking product gives customers one system to manage all business payment methods. The company already offers a corporate credit card with rewards points, and customers can now earn points for their ACH and wire transactions. 

Tannenbaum said the product has resonated with business owners who want to eliminate manual processes and save time when making payments. Brex started offering the service to existing customers and already has thousands of people on the waiting list, Tannenbaum said.  

Search for Ideas in New Places 

In the race to improve its banking products, including its business banking products, Citizens Bank has turned to “hackathons” – part recruiting event, part opportunity to find new fintech partners. 

Held in Boston’s Seaport District during the weekend of Oct. 4-6, the bank’s most recent hackathon brought university students, fintechs and tech enthusiasts together to work on “the future of money,” as the event was billed. 

Diane McLauglin

 “These types of events really will foster getting to know the fintechs, attracting some local talent, and really educating people that the banking industry is changing,” said Michael Ruttledge, Citizens’ CIO and head of technologies. “We’re transforming the banks – our physical footprint – at the same time we’re transitioning to digital. How we marry them is really important.” 

Young, who heads Citizens’ fintech accelerator relationships, said hackathons provide an opportunity to hear fresh perspectives from outside the bank. Citizens both builds products internally and partners with fintechs, when possible, to avoid having to “reinvent the wheel,” he said. Citizens works with 18 fintech companies and expects to add a few more before year’s end.  

Frédéric Chanfrau, CIO for Citizens’ commercial bank, said the hackathon also provided the bank with a recruiting platform, as Citizens plans to hire more engineers in the future. 

One of the ideas that came out of the hackathon was a way for bankers to monitor business customers in real time. Using the example of a restaurant, a group of students identified ways to notify the bank of online reviews and reservations, while also tracking the restaurant’s daily financial activity. Chanfrau said this type of service would help bankers understand potential issues within a business ahead of time, giving bankers opportunities to identify corrective actions early on. 

The fintech i2Chain won a $10,000 first-place prize for developing a security product, an issue critical to banking business relationships, that protects business documents. 

Clients in Control 

Customer expectations are driving the future of banking, Young said. 

“Never in the history of commerce has the customer been more in control – that stands for both our consumer clients who have individual personal relationships with the bank as well as our commercial clients,” he said. “The client being more in control means that as an organization we have to be more nimble to react to what the clients are actually looking for from an experience standpoint.” 

Just as banks have had to adapt consumer experiences to new realities, lenders have to realize their business customers’ demands are changing, too, said Needham Bank’s Campanelli.  

“If you’re doing something today the same way you did it five years ago, chances are you’re doing it wrong,” he said. “It’s about taking what’s worked for the last 120 and changing and improving what we can do better.”