Last week we learned that U.S. Bank, the 5th largest bank in the U.S. ($85 billion market cap), is diving deeper into the SMB space by acquiring Chicago/San Francisco-based Bento Technologies. The seven-year-old fintech start-up had only raised $18.5 million to date. The company’s core solution is to provide SMBs with an “easy-to-use” (why are they never hard to use?) payment and expense management services.
U.S. Bank’s play here, like so many others, is to offer small businesses a holistic view of the financial situation. In the corporate world, there are large teams responsible for “financial management.” For small business owners, this term often meant little more than ensuring there were enough singles and fives to make change.
From Loose Change to Liquidity
But that world is changing with so many transactions shifting to touchless and online. That shift means that a business owner will need to be sure that there’s enough liquidity in the accounts to cover payables. There is clearly a race underway for banks to secure their role in the future of the small business operator. That’s going to take a lot of foresight. And presumably some risk.
Tim Walsh, vice-chair of Consumer and Business Banking at U.S. Bank had this to say about the state of the market.
“Business owners work hard every day to turn their passion into a business. Our goal is to make money management easier for them so they can spend less time on administrative tasks, and more time on doing what they love – serving their customers. This is why Bento Technologies is a great fit for U.S. Bank.”
We note the language the executive uses, “money management”. This sounds like a term something a mid-market or enterprise company might use. We doubt lots of small businesses think about “money management.”
U.S. Bank had a hole in their offering on the accounts payable side of things. By integrating Bento into their solution, the company can tell small businesses that their offering can handle both their accounts receivables and accounts payables.
The ‘One-Stop’ Future, Again
Bento founder Farhan Ahmad said the following about this transaction.
“Small businesses are the lifeblood of our economy. In 2014, Bento pioneered the concept of smart corporate cards and automated spend management for small businesses. I’m proud to say that we have saved our customers millions of dollars since then. We are now very excited to join U.S. Bank in order to accelerate our vision of creating a one-stop financial operating platform to help small businesses that serve communities across the country.”
We see this relentless pursuit to offer small businesses a “one-stop” solution in most of these press releases.
We’ll continue to see a strong push into the small business market by old and new players across the spectrum of business operations. For some time we’ve imagined a world where small business owners can operate their businesses via the constellation of integrated apps on their mobile devices. That world we imagined half a decade ago seems to be gaining focus.
So as small business operators shift their mindset to adjust to and take advantage of a Covid-19 impacted world, they’re realizing the need to meet the new demands of the modern consumer. Meanwhile, they also need to find ways to add capacity without adding people. That’s the state of the small business world going forward. And the company’s that fully appreciate these challenges will have an advantage in the small business marketplace.