For years, banks, credit unions, and other financial institutions have been recommending QuickBooks for their business customers to maintain their accounting. Yesterday, Intuit announced that QuickBooks is now offering online banking for its users. QuickBooks Online counted 3.2 million US-based small businesses as customers in 2019, and is now moving forward to take those customers away from their current banks. Will these same financial institutions continue to recommend or support a competitor?

What is QuickBooks Offering?

In simple terms, QuickBooks now offers its users a deposit account. They call it “QuickBooks Cash, a New Business Bank Account With a 1% High-Yield Interest Rate.” This account replaces what is referred to as a checking or operating account from which businesses transact with customers, vendors and employees. For years, businesses who use QuickBooks have been able to synchronize their business checking accounts with QuickBooks, so all their deposits and withdrawals get imported into QuickBooks. Your bank might even have been pressured into providing a special type of export file type to be imported into QuickBooks. With this announcement, QuickBooks has eliminated the need to synchronize with any other bank or import any type of file. QuickBooks is now functioning as the bank, so every payment and deposit that goes into or out of that QuickBooks deposit account is now automatically in QuickBooks. Good for businesses from an efficiency standpoint; perhaps not in other ways. Certainly, bad for banks.

Why is QuickBooks Offering Deposit Accounts?

QuickBooks began offering loans a few years ago. QuickBooks’ deposit accounts are a natural offshoot of growth for Intuit, who has slowly, but steadily crept into all aspects of small business finances. Their offering promises to make small business accounting even easier by cutting out that “middleware”, meaning the small business bank or credit union. Offering a deposit account makes sense for QuickBooks, as long as it is understood that they are now directly competing with all the banks who have recommended QuickBooks to their small business customers for years.

What Does This Move Mean for Small Business Banking?

QuickBooks is now a competitor to any bank who caters to small businesses. Of particular concern, small businesses touch and interact with QuickBooks on their computer and mobile device screens every single day, multiple times per day. How often does your bank interact with your small business customers? QuickBooks’ move has thrown gas on the “digital transformation” fire that COVID19 and PPP started, and is forcing financial institutions to respond, not only with digital solutions, but with more frequent, data-driven customer interactions.

How Should Banks Respond?

In short, pick the technology partners that help them grow with their customers electronically. ! The COVID19 pandemic and PPP have pushed traditional banks to transition faster than they had planned into more and more electronic and online services for their customers, simply due to the fact that in-person transactions have become problematic. Therefore, there are three ways that all banks who cater to small businesses should change:
  1. Embrace the digital banking transformation fully and completely.
  2. Stop recommending your largest competitor.
  3. Start recommending a solution that keeps you at the center of the relationship.

How do you do it?

Embracing digital banking solutions sounds simple, and strategically, that might be simple to move to the top of the strategy board. But turning every single banking transaction into a digital transaction is not nearly as easy as it sounds. Financial institutions, once they’ve embraced digital throughout the organization, must decide to build it internally or partner with a fintech software company. It’s not difficult at all to stop recommending QuickBooks. The question is, when your small business customer needs a solution to help them manage their money, what solution will you recommend? Of course, we’re biased, but we’ve spent 9+ years building a solution that helps financial institutions get in sync with their business customers digitally. With payments, cash flow management, automated accounting, and more, FINSYNC helps small businesses and their bankers succeed by connecting the small businesses to the financial institutions every day, multiple times per day. Here’s how:
  1. Your businesses receive the best cash flow management tools that don’t compete with you for deposits or other lines of revenue.
  2. You receive non-interest, recurring revenue on FINSYNC’s services.
  3. When your businesses need capital, they’re defaulted to your lending team through FINSYNC and your team is provided the tools they need to analyze and fund deals faster.
Unlike QuickBooks, we are an all-in-one payments platform that automates accounting and helps businesses manage their cash flow. When your customers sync their existing bank accounts to FINSYNC, they are immediately empowered with a better alternative to QuickBooks and the QuickBooks bank account product. Now your customers can interact with you and your bank everyday instead of with QuickBooks.

Learn More

Read our recent press release on FINSYNC's launch of Cooperative Structure to Help Community-Based Financial Institutions Compete. Schedule a free, no obligation overview of how FINSYNC can help you and your business customers succeed today.
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