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12 Reasons Why Small Business Owners Should Switch to Digital Banking


Apr 20, 2023
12 Reasons Why Small Business Owners Should Switch to Digital Banking


What’s the resource you prioritize the most as a CEO or a small business? “Time is money” – is the most common answer. Well, saving your precious man-hours can translate to increased revenue!

There’s no point denying that you’ve got associates to meet, sales targets to realize, and entrepreneurial tactics to chalk out. Standing in the queue for banking services isn’t something you’d consider in your chores.

Banks operating in traditional brick-and-mortar setups can consume valuable business hours. Neither would it be practical or safe to entrust a dedicated team to handle your banking. With digitization driving the global business paradigm toward a fast-paced future, why not switch to digital banking?

Embracing digital banking can significantly streamline the process of receiving payments from your clients, too. Do you know that 78% of US adults accessed their bank accounts through a website or mobile app? Just 29% of the US population still carries out traditional banking transactions.

So, how about switching to digital banking to streamline money transfers from both ends?

How relevant is digital banking to business owners?

Think of how banks operated a decade or two ago. As a business owner, you’d repent squandering time visiting banks to withdraw or deposit money, transfer funds, and obtain the latest statements. Given that banks serve hundreds of clients each day, who would compensate for the lost man-hours as you wait in the queue?

With the inception of digital banking, CEOs and small business owners can access bank accounts virtually at any given time or place. Gone are the days when you needed to visit the branch to seek banking services. With mobile banking and internet banking streamlining digital banks, you reserve the liberty to choose any time you are comfortable with.

Whether you are at your office or home, traveling or relaxing, digital banking brings you unprecedented independence!

The relevance of digital banking to small business owners becomes even more practical when you evaluate these statistics.

  • A study by the Bank of America reveals that 85% of small business customers count on digital payment channels.
  • Between 2018 and 2022, the share of the US population using digital banking services increased from 61.3% to 65.3%.
  • In 2021, mobile banking was the primary method for 43.5% of US bank account holders to access their accounts. Just 14.9% of the population counted on bank tellers, in contrast.
  • 87% of the respondents in a Chase survey admitted to using their mobile banking apps once a month at least.
  • In 2022, as much as 77% of US citizens had a mobile wallet to make digital payments.

Benefits of digital banking for small businesses

Let’s have a look at the plethora of benefits that digital banking brings to the table.

1. Greater convenience

Well, digital banking brings you perks beyond skipping queues and staying productive. Making transactions have become far more convenient and accessible, thanks to virtual payment modes.

Simply downloading the app or accessing your bank’s website empowers you to process salaries and transfer money. CEOs and business owners can also monitor their accounts at any convenient time through a mobile device, laptop, or computer. Since business owners need to make several daily transactions, digital banking significantly eases the process.

Accountants and cashiers, too, need not wait for the month to check transactions. With online bank statements easily available, your teams can instantly check the status of wired funds or deposits. This way, you can detect errors or spot delays in payments in real time.

As a business owner, you know how much failed payments can bother you! Digital banking brings you mental peace that drives your productivity.

2. Enhanced security

At one point or the other, business owners need to entrust their account management to others. Thanks to the plethora of features you enjoy with digital banking, you can set specific employee access to your account.

After all, you won’t allow all your employees to access your bank account, right? With select employee logins and passcodes, CEOs can control who accesses their accounts. This eventually leverages the overall financial security of your company.

Of course, you reserve the liberty to decline access for ex-employees or even existing ones if the need arises.

Other security features that digital banking brings to the table include the following:

  • The biometric login authentication feature ensures that only authorized individuals get access to your bank account.
  • Your bank may request additional authentication if someone tries to log into your account using an unknown device.
  • Digital banking also enables account holders to set up MFA (multi-factor authentication) for stronger security purposes.

Apart from this, small business owners can also secure their digital banks through the FDIC (Federal Deposit Insurance Corporation). This would compensate them for losses worth $250,000 in case of fraud or loss for each bank.

3. Global access

Remember those days when banks used to test your patience as you waited for a paper settlement? Even checking your account balance required you to call your bank or visit the branch.

With digital banking, business owners enjoy the freedom to log into their accounts from any part of the world. Even if you are on the go or on your way to a client meeting, simply log in to your account through a mobile app to check the statement. This way, you can inspect whether your check has been cleared or received a pending payment.

Amidst the digitized business infrastructure where small business owners strive to fulfill their targets, global access to their bank accounts is a boon!

4. Fraud alerts

Well, you have been channeling your efforts and resources to consolidate your business or startup. A banking fraud would be the last thing to expect to derail your goals.

With digital banking, reputed banks notify account holders immediately if they notice suspicious activities on their accounts. For instance, you might receive a notification through email or text if there’s a significant transaction in your account.

Similarly, if your credit card is swiped in a different location apart from the regular one, your bank might raise a fraud alert. It’s always wise to remain secure rather than repent your loss later!

5. Simplify vendor payments

Often, you happen to overlook the ease of processing business pay bills. Amidst tough competition, business owners would be more focused on their core competencies. There’s no point draining your time writing checks and mailing them.

With digital banking infusing freedom into your work environment, you can process vendor payments even on the go.

6. Data-oriented advice

One of the less-known perks of digital banking for small business owners is the availability of data-driven advice. Your bank transactions generate sizable volumes of data, particularly when you scale up your business activities. For small business owners, analyzing this data proves to be tremendously gratifying.

Digital banks analyze financial data by deploying machine learning and artificial intelligence. This way, entrepreneurs can get valuable insights into improving their performances.

For instance, trend analysis can help you manage your inventory better. It may also advise small businesses when to get a dedicated inventory management system. Therefore, as you grow your business, you continue to strengthen your operational infrastructure.

Some digital banks also offer features like performance measurement. This enables business owners to bank on smart analytics tools to evaluate performance metrics such as revenue growth for their organizations. Comparing these values to those of your competitors, you can gain clarity on where your business stands in the industry.

7. Zero paperwork ensures productivity

Let’s face the hard fact: paperwork in banking eats into your productive hours.

Now, with digital banking, small business owners can gain access to their accounts from any location whatsoever. By eliminating paperwork, you can significantly save precious manhours for your business.

Whether you want to transfer funds, deposit checks, or check your statement, you can perform these tasks remotely.

Also, some digital banks enable business owners to manage their operations by configuring a text alert mechanism. This system keeps track of the payments made by your firm and notifies you if there’s a low balance in your account. Entrepreneurs benefit from this instant access to their digital bank accounts to maintain proper control over transactions.

Besides, you can seamlessly transfer funds between your business and personal bank accounts.

8. Download organized financial reports

One of the perks of switching to digital banking for business is that you can download digitized financial records. This helps in keeping all your commercial records organized. Your accounting department or bookkeeper can seamlessly scrutinize the transaction with these organized reports.

These reports include any transaction made through internet banking, phone banking, ATM withdrawals, credit card transactions, deposits, and transfers. Why not keep things transparent and tidy and everything under your control?

9. Get account-related services online

Small business owners usually stay obsessed with their entrepreneurial pursuits during the weekdays. This leaves them only the weekends to deal with account-related services. Given that physical banks would remain closed on weekends, it’s logical to switch to digital banking. This implies you can update your financial details, order cheque books, view order statements, or apply for business credit cards after office hours.

Besides, some business owners also engage in trading and investment through digital banking platforms. A single mobile app or web interface would cater to all these requirements.

10. Financial assistance

Small and medium-scale enterprises (SMEs) often get financial services from banks. With the digitized channels available, applying for financial assistance or loans has turned out to be much easier. While traditional banks are often reluctant to sanction loans to SMEs, digital banks offer generous financial privileges to entrepreneurs.

In case you have strategized a path to scale up your operations and need a loan, having a digital bank account would be helpful. When it comes to loan processing, digital banks are more flexible and adaptive.

11. Digital banking services are affordable

Do you know why small business owners are quickly embracing digital banking services? The virtual banking infrastructure has proven to be more cost-effective compared to the physical ones.

First, enterprises can eliminate the overhead costs associated with purchasing papers and stationery. Physical banks often levy heavy fees on SMEs to compensate for their transactional and operational costs.

On the other hand, digital banks don’t have such costs associated with them. This reduces their operational and transactional costs significantly. Before opening an account with a digital bank, business owners must check out the associated charges.

12. Automatic bill payments

Consolidating your small business calls for your diligence and time. Why overwhelm yourself with recurring bill payments or other non-essential activities? With digital banking, it’s easy to automate your bill payments. This way, you need not bother yourself about payment deadlines, particularly with several bills to clear.

The automatic bill payment feature in digital banks enables small business owners to schedule payments. A few clicks on your mobile handset can get this payment schedule configured. The system works just like recurring fund transfers.

The advanced system also ensures that small business owners are on time with their utility bill payments. This ensures that you don’t end up missing out on any deadline, saving you from penalties.

Most importantly, business owners can scrutinize the entire billing history in a comprehensive platform later. So, if you need any record about your utility bills or payroll, you can simply log into your digital banking account and check it out.

Small business owners can also stay ahead of their tax-payment deadlines with digital banking services. So, you need not worry about harsh legal consequences if you are too engaged to visit your bank physically.


Well, if you are yet to switch to digital banking, you know where you are compromising the integrity of your business.

Online banking ensures better security, transparency, and organization of your financial records. We have comprehensively discussed the multiplicity of benefits small business owners can reap from digital banking. No wonder startups and new enterprises are opening their business accounts and applying for credit cards digitally!

The post 12 Reasons Why Small Business Owners Should Switch to Digital Banking appeared first on Due.

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