Should small businesses opt for the faceless bank?

4 min read

Anything connected to the internet — from smartphones to power plant controllers — can be manipulated. — Photo: © DJC

A good marketing campaign can really make a difference in attracting new customers in any sector. This is even the case with online banking. This focus on the marketing process is according to data from a new survey of 500 UK business leaders and decision-makers conducted by NerdWallet.

This survey into customer attitudes to ‘faceless’ banking found that 44 percent of UK businesses have switched to an online-only bank in the last 12 months. It would seem that the millions of these brands spend on advertising have paid off to a degree, with 42 percent of businesses indicating that one of the main reasons they switched accounts was the result of a good marketing campaign.

However, is it really such a great idea to allow marketing tactics to sway a person’s vote when selecting a business bank account?

Looking into this issue for DigitalJournal is Connor Campbell, business finance expert at NerdWallet.

Campbell begins by assessing the survey data: “Our survey was primarily interested in finding out how many small UK businesses are making the switch to online-only banking providers. What we found was that, not only are almost half of businesses utilizing these faceless banks, but many are motivated to do so due to the way these banks market themselves.”

Expanding on this, Campbell says: “Traditional brick-and-mortar banking has been the norm for businesses for decades, providing essential services including business loans, bank accounts, and credit cards to organizations of all sizes. For these ‘underdogs’ online-only banking alternatives to be gaining so much traction really highlights the power that marketing has.”

Campbell does not mean to imply that small businesses are totally sucked in by marketing ploys for they will conduct their own research as well: “However, of course, it is important for business leaders to do their research when selecting a company to bank with, rather than allowing themselves to be led purely on marketing strategies.”

There will be nuances that differentiate the competition, explains Campbell: “Each online bank will provide slightly different products or services, with their own fees and pricing structures – meaning that a bank with a less flamboyant marketing campaign could actually offer a more competitive product that better suits your business.”

Campbell assesses how far marketing can go: “While there is certainly something to be said for the power of marketing as a tool to attract customers, offering a much-needed ‘refresh’ to industries that have typically been stereotyped as ‘boring’, this shouldn’t be solely relied upon when choosing the right banking provider for your small business.”

To help business leaders make an informed decision about who they bank with, Campbell advises:

  • Check the services offered by the bank and compare to others
  • Each bank will offer their own products, and different banks may offer services that are more or less relevant to your business. When deciding on a business banking provider, you should consider what services your business needs, such as the ability to cash a check in-app, automatic money transfers, and the option for telephone or online banking.
  • Additionally, you should be looking out for factors such as monthly fees, costs per transaction, overdraft fees, and any other additional charges that could potentially catch you out.
  • Think about how comfortable you are having no face-to-face support.

In summing up, Campbell cautions: “Faceless banking works perfectly for some, but it may not be suitable for all. If your business regularly needs to make more complicated transactions, or you feel concerned about being able to report any potential issues to the relevant support team, a more traditional face-to-face banking service may be more appropriate for you.” He further warns: “Additionally, many banks that have in-person branches tend to offer additional support services, such as providing advice for small businesses – which can be a beneficial learning opportunity that also provides peace of mind, should anything happen.”

You May Also Like

More From Author

+ There are no comments

Add yours