SMEs and digital banking: what you need to know

Digital banking has taken the world by storm over the past decade. There's hardly an industry or sector that doesn't use it, and it's become standard for consumers. Almost any person with a smart device that can connect to the internet is able to use digital banking, should their bank of choice offer an online banking platform or service for computers, mobile phones and/or tablets.

In fact, as of 2021, the digital banking market was estimated to be worth almost $4.5 billion. And, as of 2022, it was reported that over 200 million Americans use some sort of digital banking. Given its popularity, it makes sense that businesses both big and small are also utilizing this revolutionary technology. According to the same Bankrate report, approximately 85% of small businesses use digital banking, and one-fifth are dependent on online services to generate revenue.

Your customers use digital banking and your business should, too.

So, as a small business owner, what are some characteristics of a digital banking platform that you need to consider when opening an account? What type of online banking services will best suit your business needs? Let's take a look at some of these items:

The scale of your operations

Perhaps most obviously, the amount of money you're handling at your organization should influence your digital banking decisions considerably. The more cash that's flowing through your account(s), the more flexibility you'll need from your bank. This will also potentially affect how many accounts you need, which is another factor that will affect your decision (the ideal is to have one financial services provider that can meet all your needs).

The number of your suppliers

Similar to the size of your business, the number of vendors with whom you partner can have an impact on the nature of the digital banking services you require. If you use multiple distributors to source different products, your day-to-day process can become a bit complicated or even convoluted. As SME Finance Forum explains, you'll need digital banking that can help simplify and streamline paying your providers.

Your data's sensitivity 

Naturally, irrespective of your industry or client-base, you'll want to keep your financial information private and protected. However, depending on the sector in which you operate, your data may be in need of greater security than other businesses. The degree of security these details need may also govern the type of digital banking services and institution(s) opt to use.

If you're a small business owner in need of legal advice vis a vis your finances, reach out to the Law Offices of Donald W. Hudspeth, P.C.

Categorised in: Arizona LLCs, Business Law, Starting a Business in Arizona

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