- Indiana-based First Internet Bank of Fishers on Monday launched a checking account for small business owners, a product the digital banking pioneer says will give customers greater control over business finances and personal.
- First Internet’s Do More Business Chequing Account allows business owners to earn interest and conduct unlimited transactions. The account also allows small business owners to link their business and personal checking or savings accounts, credit cards, loans, and investments.
- The $4.1 billion asset bank said the new account is the first release of its Do More Business platform aimed at helping small businesses simplify day-to-day operations and spur growth.
Overview of the dive:
“When you’re founded by an entrepreneur, you’re encouraged to think like a startup,” said Nicole Lorch, president and chief operating officer of First Internet Bank. “It gives us a unique perspective in delivering innovative solutions to meet the needs of small businesses.”
First Internet, the first digital-only institution insured by the Federal Deposit Insurance Corp. (FDIC), aims to provide small business owners with insight into their finances by breaking down spending trends by category. The account also offers a budgeting tool and transfers.
“Now, more than ever, entrepreneurs need to effectively track all of their finances — business and personal — to save time and money,” Lorch said. “Do More Business Checking allows small business owners to focus on managing their operations with a clear idea of their overall financial situation.”
First Internet’s new account creates a one-stop shop for small business owners, many of whom turn to third-party vendors for various business-related tasks, according to research by Cornerstone Advisors.
Small business owners spent more than $500 billion on accounting, invoicing, bill paying and accepting payments from third-party vendors in 2020, the consulting firm found.
According to the report, about four in 10 small businesses with revenues over $5 million said they would “definitely” consider a bank for their accounting, invoicing, bill paying and payment acceptance services. . This represents a $370 billion market opportunity for banks, Cornerstone said.
A number of fintechs have been launched with the mission of filling the banking gap for small businesses. The industry, however, has seen fluctuations in how fintechs have structured their business models around serving the segment.
Brex Corporate Spend Management Firm announced in June he made the “difficult decision” to stop serving traditional small business clients so he could focus on venture capital-backed startups.
Azlo, a neobank that offered small businesses a subscription banking service and a subsidiary of BBVA USA, was the victim of the decision of the Spanish lender to sell its retail arm in the United States to Pittsburgh-based PNC for $11.6 billion in 2020.
Azlo’s shutdown sent a wave of former users to small business banking platform Novo, prompting the neobank to launch new features including billing and budgeting, Novo CEO Michael Rangel said. . says Banking Dive in March 2021.
Bluevine, another fintech targeting the small business market, offers checking accounts and lines of credit to small business owners. Bluevine launched in 2013 with an invoice factoring product, a feature it sold to FundThrough in January, according to protocol.
As fintechs continue to find ways to tap into the small business market, traditional banks need to be aware of the financial needs of entrepreneurs, wrote Ron Shevlin, director of research at Cornerstone Advisors. Forbes.
“Banks must integrate into the day-to-day operations of small businesses to achieve the speed and agility needed to compete with new competitors,” Shevlin wrote.