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Rise of the Self-Employed: Banking’s Untapped Opportunity M a r c h 2 0 1 9

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Corey GrossCo-Founder & CEO, Sensibill

Corey is an entrepreneur and thought leader in the world of payments, digital banking, and business financial management.

Sensibill is the provider of receipt solutions and data services to financial institutions globally.

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Jacob JegherSVP Banking and Head of Strategy, Javelin Strategy & Research

Jacob Jegher is an experienced fintech executive and digital banking thought leader. He advises clients on emerging technologies and business strategies related to retail, small business, and corporate digital banking.

Jacob provides strategic consulting to financial institutions and solution providers on issues ranging from digital strategy to vendor selection.

E X P E R T G U E S T S P E A K E R

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“No Man’s Land”

Personal Banking

Small BusinessBanking

The lines of business in banking need a transformation

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Source: Research Now & Sensibill 2019

51% of self-employed customers use personal banking exclusively

Small business owners are hiding in personal banking accounts

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Busting the “unprofitability” myth

Make more than

$75,00011%

Make more than

$100,0006%

Source: Research Now & Sensibill 2019 7

Employee for someone else

Retired

Self-employed

Self-employment drives more credit card revenue

8Source: U.S. Federal Reserve (2016 Survey of Consumer Finances)

100,000 5% $451# of self-employed in personal

banking

xconversion rate

xaverage business

banking fees

= $2,255,000Revenue per year

The long term cross-sell opportunity is lucrative

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But first, banks need to do a better job retaining theirself-employed customers.

© 2019 Javelin Strategy & Research

Banking channel adoption among consumers at primary FI, 2004-2021

Banks must shift focus from adoption to engagement

11© 2019 Javelin Strategy & Research

TRADITIONAL CHURN

SILENT CHURN

% of small businesses

Switch all accounts/products to a new bank

Shift some accounts/products to another bank, but maintain primary bank relationship

Propensity to switch or shift accounts/products to another FI

‘Silent churn’ is the real threat

© 2019 Javelin Strategy & Research 12

Digital has allowed for the commoditization of financial products


of self-employed consumers have multiple banking relationships.

53%

Number of relationships with banks and credit unions among self-employed consumers

The self-employed are the most likely to shop around


Online banking capabilitiesConvenient location of branches

Mobile banking capabilitiesCustomer service

Convenient location of ATMsLow cost or fees

Direct deposit is set up with FIFraud protection services

Bill payments are set up with FIPersonalized attention

Attractive terms on accounts and investmentsServices that help manage personal finances

Breadth of product offeringsDo not want to transfer products

OtherNothing will prevent me from leaving primary FI

% of self-employed consumers


Reasons mobile-using self-employed consumers stay at their primary FI

Digital capabilities are vital to “stickiness”

NeobanksAccounting Expense Management Big Tech

If banks don’t service the self-employed, somebody else will

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Third parties tout bank disintermediation

of third-party expense reporting/receipt capture users say they’d prefer to use a service offered by their primary FI instead

51%

% of businesses

Bill payments

Accounting/bookkeeping

Expense reporting/receipt capture

Invoicing customers

Banks can lead the charge with financial management solutions


The catalyst for change: Neobanks


AzloInvoicing tool

Bank NovoAvailable balance and

transaction categorization

TideMobile credit application

QontoEmployee card controls

Neobanks innovating for small-scale businesses


Winners will use digital to generate growth

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Increases customer loyalty

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Delivers customer value

1

Expands customer profiles4

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Generates new data

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Creates engagement

2

Drives new revenue

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Personalizes services

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Pay for use. Similar to a software pricing model that crosses traditional LOBs—unlock features for a price.

Commission model. Charge third parties for recommending services.

Revenue-sharing ecosystem. Offer products at the intersect of related industries—“non-banking”.

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3

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Opportunities to jumpstart revenue

Stay ahead of the market, capture the segment:

The top 5 mobile banking features to prioritize

Tide Bento

1. Business-specific card controls


Tide Square QuickBooks

2. Mobile invoicing tools


Tide OnDeck


3. Mobile loan origination capabilities

Chase Ink Spend Manager from Amex Capital One Wallet


4. Expense reporting and receipt capture

How important is having an accurate cash flow projection to running your business?

How is your company currently calculating your cash flow?


5. Cash-flow insight and advice

Engage & retain with mobile—avoid “silent churn”

Takeaways

Grow business relationships in the longer term

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Expand product approach—“non-banking”

Value-add at the core of the offering

Transform pricing models

Thank You!Any questions?

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Get in touch

[email protected]

@getsensibill

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[email protected]@JavelinStrategy

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