Gartner : What CFOs Expect from Today’s Financial Providers

As the CFO's banking needs have shifted during the pandemic, many are looking at the strength of their banking relationships and whether those partnerships will fulfill their companies' needs. Financial providers that do so successfully will reap significant rewards. The commercial bank, and perhaps more specifically commercial payments, represents an enormous growth opportunity for financial services firms. To capture the opportunity, executives are making significant technology investments to grow and transform the commercial bank. For example, 47% of commercial banking leaders have deployed digital process automation, 41% have deployed cloud technology, and 35% have deployed AI toward the goal of business model transformation, representing a substantial increase from prior years. The urgency only heightens as forces of technology disruption that originated in the consumer space work their way up through small business banking, the commercial banking space, and finally into the middle market.

To ensure that these digital investments aim in the right direction, banking leaders must understand the needs of CEOs, CFOs, and other leaders at small- to mid-sized companies who make decisions on their firms' relationships with financial providers. Fortunately, Gartner's recent Voice of the Financial Decision-Maker survey does just that. We surveyed over 400 executives from small-to mid-sized enterprises regarding their relationships with banks and emerging players such as fintech firms. Our analysis yielded some fascinating insights to help shape your efforts to acquire and engage clients.

Key insights from the survey to shape your strategy and go-to-market approach include:

• Competition for small- to mid-sized customers is heating up - companies of all sizes increasingly engage financial providers other than traditional banks to meet their needs. While 94% of companies in our survey have relationships with traditional banks, nearly half also have relationships with non-bank financial companies (includes private equity, venture firms, etc.) and/or technology firms (includes start-ups, fintechs, etc.) to meet their financial needs.
• Customers are relatively most likely to consider non-bank providers for payments needs - while 57% of respondents stated that they would most likely consider a traditional bank for new credit needs, only 44% said the same for payments products. Liquidity management needs fell in the middle, with 52% of respondents saying they would most likely consider a bank for needs in that area. For respondents who would not look to a bank first, a substantial chunk of them are equally likely to consider a bank or a technology firm for new financial needs. This means that banks are not falling out of contention with business clients but must remain vigilant to emerging threats.
• Clients value banks for customer service and security, tech firms for their innovative technology - for credit, liquidity, and payments needs, we asked respondents what factors might cause them to switch from a bank to a technology provider, and vice versa. Common drivers to switch to a bank include information security, strong customer service, and competitive pricing. Reasons to switch to a start-up or tech provider include the innovative technology and superior data capabilities offered by these firms.
• Cryptocurrency needs are on the rise - while only 10% of respondent companies currently use cryptocurrency to send or accept payments, another 20% plan to deploy it within a year and then 16% within the next five. Only one third of respondents stated having no interest in using cryptocurrency at their firms. Banks must continue to be attentive to this space as clients' crypto needs evolve.
• Use of RTP is growing - 14% of respondents have already deployed real-time payments, 12% plan to do so within the next year, and 18% will do so in the next 1-2 years. Most of the remaining respondents exhibited at least some interest in the technology. Some banking leaders have expressed concern that RTP uptake and use cases appear to be slowing, but our data indicates that interest among clients remains strong.

To respond to these trends and meet the needs of small-to mid-sized enterprises, banks must invest to deliver new types of customer value. They will need to deliver more personalized offerings via a more empathetic client experience, backed by the right investments in talent and technology.

To learn more about how firms invest to capture growth opportunities with business customers, click here for commercial banking insights from our 2021 Financial Services Technology Survey. You can also learn more about how small business owners work with financial providers here.