Community financial institutions are meant to be just that — community-oriented. But with the rise of the digital banking era, you may inadvertently be turning off your small business owners.
Credit unions and local banks are working hard to improve their digital channels and the features they provide. An important emerging feature is transaction data enrichment, where an outside “data enricher” cleans user data and often adds logos, location data, merchant tagging, and categorization to a user’s transaction feed.
But since the early days of data enrichment, small businesses have been left out. Large companies, like Amazon, Apple, and Starbucks, benefited from added logos, location, and other supplemental information. But since it requires more time and resources to find accurate logos for local businesses, much of the time they are simply left blank. Without a logo or location, the consumer and the business owner receive subtle messages about how that business stacks up.
There could be some real consequences for institutions that continue leaving out small businesses when it comes to data enrichment. FinGoal’s CEO, David Nohe explains that “banking local and shopping at local small and medium-sized businesses is at the core of community banks and credit unions.”
“With transaction cleansing and enrichment you can add really great categorization, descriptions, and even beautiful logos for the biggest 500 companies in the world – that's easy. What's hard is making sure that the local bookstore, the local coffee shop, the independent grocery store, the local insurance agent are all also recognized and enriched with their own beautiful logos.”
Most enrichment services adding logos and other supplemental fields simply aren’t putting the time and investment into adding this data for any local businesses. If not addressed, those who bank locally, shop locally, and especially local business owners will begin to feel excluded in their banking experience.
“What happens when that small business owner logs into their bank – where they process payroll, payments, and invoicing, and where they acquired their business loan to expand into a new market? They see their giant big box competitor has a beautiful logo, but their own business doesn’t at the local institution where they do all of their own banking with. What does that say?”
Nohe says, “Institutions are unintentionally communicating that small and local businesses are second-class citizens on these platforms and that it’s not worth making them look as good as the big companies. If you’re a small community bank or regional credit union, you sure as hell can't be communicating that.”
It’s crucial to align your messaging. Advocating for local banking, but not building out local-first features on your digital channels creates a big disconnect. It’s not enough to speak about your values of shopping. You have to demonstrate your support for local businesses. You need more than just any data enrichment. You need a data enrichment provider that invests time and resources into enriching small business transactions. Your local businesses deserve the same support the nationwide corporations are receiving.
And while that may seem like a tall order, providing quality, enriched transaction data is more accessible than you may think. Contact us to learn more about our transaction data enrichment services starting at just pennies per user.