Relationship banking is the secret sauce to successfully banking SMB customers - Tearsheet

"Banks touch the beating heart of a small business, its cash flow. And yet for years, many institutions have failed to leverage their position to build deeper and stickier relationships with SMB customers. For banks like KeyBank, the new era of small business banking relationships centers on advice - revamping the SMB-bank relationship from a transaction hub to a business consultation and growth advisor."

""Our products and services are all centered around the cash flow conversation. The primary objective of the Key Conversation is to understand how the money flows through the operation, find where there may be opportunities to benefit from managing their collection and payable processes differently, maximize the returns of cash positions, and protect against fraud," said Mike Walters, President of Business Banking at KeyBank."

"The SMB customer profile The challenges of being an SMB owner can be abstracted into three categories: Isolation: SMB owners are the CFO, CMO, COO, and CEO all at once, or what Walters terms, "the Chief Everything Officer". This means they bear the responsibility of making the right decisions in multiple realms of their business, regardless of their personal expertise in that domain."

Banks have direct insight into small business cash flow but historically underutilized that position to deepen SMB relationships. KeyBank launched a Certified Cash Flow Advisor Program to give SMB owners guidance on running and growing their businesses. Bankers use a framework called Key Conversations to engage owners on cash flow and financial challenges. The program focuses on understanding money flows, optimizing collections and payables, maximizing cash returns, and fraud protection. SMB owners face isolation as multi-role operators, proliferation of fintech tools that fragment operations, and vulnerability due to limited revenue cushions and inflation-related pressures.

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