The news: Simplicity, speed, and personalized human support are the top priorities for small-business owners seeking a loan, according to an Academy Bank study.
Nearly three-quarters of small-business owners still prefer in-person service despite the benefits of a speedy online process.
The research also reveals that younger entrepreneurs show a stronger preference for digital-first banking solutions versus their older counterparts.
By the numbers: The study surveyed 222 owners of small businesses with annual revenues of:
- Under $100,000 (36.3%)
- $100,000–$500,000 (29.5%)
- $500,001–$1,000,000 (17.8%)
- Over $1,000,000 (13.7%)
- Preferred not to answer (2.7%)
They overwhelmingly prefer in-person banking services with a dedicated banker (60.3%). Digital-first banking with minimal in-person interactions was a distant second, at 20.3%. And 14.7% prefer a mix of in-person and digital experiences.
How to get ahead: While digital banking is on the rise and automation is becoming more sophisticated, banking solutions that retain a personal touch are paramount for attracting and retaining small-business owners.
The most successful banks in this arena will offer the convenience of fast, online applications—which younger entrepreneurs in particular want—while providing a human expert to guide business owners through the loan process.
Our take: We’ve argued that people still want to work with people, especially for something as high stakes as a business loan.
Gen Z and millennials are pushing the industry toward a digital-first model, but the mass market isn't there yet. This means banks can't simply abandon their physical branches or personal bankers—especially if they want to keep earning the loyalty of small-business clients. The most successful approach will involve giving these customers the option of completing everything they need in-person while simultaneously providing remote services for digital-first entrepreneurs.