Back in the day, traditional banks were the default option for all commercial banking activities. The primary function of these financial institutions was simply to accept and maintain deposits, provide loans, and safeguards their customers’ finances — that’s all there was to banking for businesses.
But in this digital age, where the business environment is rapidly changing, it is no longer enough to function merely as a depository institution for business funds.
Business owners across different industries are looking for banking options that can better serve their needs through modern features and personalised product offerings.
From alternative lenders to neobanks, newer entrants in the financial industry are disrupting the commercial banking scene as we know it today. Forbes Finance Council Member, Aaron Spool predicts that non-traditional lenders will continue to grow in the banking space to provide underserved sectors with easier access to funding; an area where traditional banks are lacking.
On top of that, fintechs are making basic financial services accessible through personalised services like virtual wallets and e-money.
With such promising product offerings, it is easy to see why there has been a decline in traditional banking activities in recent years. Although traditional banks are still considered relevant in our local economy, there’s no denying that more customers are starting to look into newer and alternative solutions available.
Your chosen financial institution plays an important role in the success of your business. As a founder, you would want to find the right business account that not only meets all of your needs but will also help you achieve your startup goals — whether it’s something as grand as regional expansion or simply saving money.
Here are three basic yet essential factors to look out for when searching for modern banking solutions for your startup and why traditional banking could be holding you back.
From overdraft charges to paper statement fees, traditional banks are often associated with
costly hidden charges. Since most of these fees don’t cost a huge amount of money, several customers continue to let it slide, which allows banks to continue making a profit. Regardless of the amount, nobody likes paying for unexpected charges, right?
More startup founders and entrepreneurs are leaning towards digital alternatives due to the transparency in the billing process. From foreign exchange rates to monthly bank fees, the pricing is presented to customers upfront, giving them the full overview of what they can expect to pay.
Since there are no overhead costs associated with maintaining and operating a physical branch, online-only banks are also able to pass on significant savings to their customers by charging lower fees and offering competitive interest rates. When it comes to banking for businesses, financial institutions should prioritise enhancing bank transparency as customers will no longer turn a blind eye to hidden charges.
In today’s ever-changing business landscape, startup founders need to search for smart and modern solutions that will optimise the way they run their company. It is not uncommon for traditional banks to have mobile banking apps, allowing customers to perform basic transactions on the go. But more often than not, that’s where it all ends.
Fintech companies and digital banks go beyond by offering personalised and advanced features like virtual cards, software integrations, and expense management to make banking for businesses simple and quick (sometimes, even fun).
Streamline the way you manage your finances and keep a lookout for these services when searching for your next banking partner.
If you are a humble startup looking to get your business concept off the ground, the road to receiving funding from banks is bound to be a tough grind.
Due to strict regulations, small businesses are less likely to qualify for a business loan due to factors such as poor credit ratings, lack of consistent cash flow, insufficient collateral or a weak business plan.
Fortunately, the primary purpose of alternative lenders is to close the small business funding gap and help underserved individuals gain access to working capital easily.
When you begin to understand how your chosen bank is directly related to the growth of your startup, you’ll know what to look for in a business banking partner. Ensure that your business goals are aligned with whatever the bank has to offer and never settle for less.
With the Aspire Business Account, reimagine the way you manage your finances in a single and unified platform. With accounting integrations, expense management features, and automated invoice management, you can run your startup with ease and leave the hard labour to us.