Small Business Lucrative For Financial Institutions 2016 June 1st, 2016
Small businesses generate slightly over half of the nonfarm private gross domestic product in North America, according to an industry report.
The United States is home to more than 26 million small businesses, accounting for $9 trillion in revenues and over $2 trillion in assets. A new report from Packaged Facts, Financial Services for Small Businesses in the U.S., indicates that small businesses can produce up to $350 billion in financial service and product revenues annually, including almost $200 billion in banking and $137 billion in insurance premiums.
The opportunities for financial services providers are many, as small business banking customers tend to carry account balances 25 times greater than the average, according to Package Facts.
Beyond loans, cash management, payroll processing and trade financing, small-business owners are in serious need of financial planning and private banking assistance because of their lack of diversification, according to the report. Almost half their personal wealth is invested in their businesses. Financial services providers can provide additional services – from retirement savings, to credit card products, to the sale of the business.
“The number of small businesses is growing daily and there are huge opportunities for financial services providers,” said Tatjana Meerman, publisher of Packaged Facts. “However, there are challenges in this fragmented market of big banks versus community ones and competition from many other players to win the entangled personal and business finances of the small- business owner. Marketers need to have a 360-view of a small business’ financial needs to provide a superior level of attention in order to succeed in this marketplace.”
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