Last year, high interest rates, inflation, and talks of a recession impacted loan demand throughout the financial sector, and banks scrambled to reverse the decline in their share of primary banking relationships with SMBs.

It’s no surprise, then, that growing deposits is the top strategic priority for banks in 2024 and 2025, according to the Jack Henry™ 2024 Strategy Benchmark.

To expand and monetize your share of the SMB market, consider three key strategies to help you increase deposits while facing slow loan demand: embrace digitalization, automate your loan origination system, and use open banking to create an integrated approach to lending.

Embrace Digitalization

Digital banking vendors have worked hard to develop a variety of banking, payments, and lending solutions to help you better serve your SMB customers. With the availability of these new tools, it’s a good time to reevaluate your product offerings.

With digital tools – and your digital platform – SMBs can access banking services anytime, anywhere, reducing the need for in-person visits, lengthy phone calls, and piles of paperwork.

Features like online loan applications, instant approvals, and automated financial management tools simplify operations, empowering SMBs to focus more on their core activities. Furthermore, digital banking offers personalized financial products and services tailored to the unique needs of SMBs, fostering stronger relationships and customer loyalty.

Automate Your Loan Origination System

To attract more SMB borrowers while mitigating credit risk, you’ll need to automate and optimize your lending environment.

By automating your loan origination system, you’ll reduce manual processing times and enable faster loan approvals and disbursements, which can improve customer satisfaction. Automated systems also provide robust data analytics, allowing you to assess risks more effectively and make better-informed lending decisions.

More importantly, automated systems facilitate seamless integration with other banking systems, enhancing overall operational efficiency – and allowing you to take full advantage of open banking.

Leverage Open Banking

If you haven’t done so already, you should consider moving to the increasingly open financial ecosystem, where 75% of financial institutions have already developed a strategy.

Through open banking, you can collaborate with third-party fintechs to offer innovative services such as real-time financial analytics, integrated accounting software, automated cash flow management, and cutting-edge tools to help SMBs streamline their operations.

Open banking also facilitates faster and more flexible access to credit by enabling alternative data sources for credit assessments, allowing you to better evaluate the creditworthiness of SMBs and foster a more personalized banking experience.

Capitalize on Your Knowledge of Local Markets

In the fight to attract and retain new SMB customers, you have an advantage over nationally-focused big banks and fintechs.

With a deep understanding of your customers’ unique challenges, operating environments, and the tools and services they need, you’re perfectly positioned to deliver both the personal – and personalized – service and support SMBs crave.

Learn how to increase your SMB deposits with industry-leading technology and a digital-first approach from Jack Henry.