The future of small business banking with Truist's Scott Stearsman

With new regulations governing small business lending set to launch, banks are considering how best to serve this market. Scott Stearsman, head of small business at Truist Bank, talks about how his bank is working with small business clients today.

Transcript:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Chana Schoenberger:
Okay, so here we are at Small Business Banking in Nashville 2023. I'm Chana Schoenberger, I'm the editor-in-chief of American Banker, and I have with me here Scott Stearsman, who is the head of small business at Truist.



Scott Stearsman:
Thank you. It's great to be here. It's my first time at the American Banker conference and it is a fabulous event here in Nashville.



Chana Schoenberger:
Nobody parties like we do. Okay. So Truist is obviously a huge regional bank, especially in this region, the south and southeast. You've been at Truist for about 10 years. What's changed and what's the state?



Scott Stearsman:
The thing that's changed the most is of course the size of Truist. Over the past two years, we've doubled in size, which gives us the capability and scale to help even more clients and what has stayed the same as our commitment to our purpose. They were both two purpose-driven organizations coming together to create truist and that allows us even a greater ability to live our purpose, to inspire and build better lives in communities.



Chana Schoenberger:
Very cool. Okay, so what is happening in small business banking right now in terms of making it more digital? So you said you come from retail, which is increasingly more digital. How is that leaking over into small business banking?



Scott Stearsman:

We've actually seen quite an increase of digital adoption in the small business space. Our clients are using the digital capabilities to help manage their business even more now than they have in the past. One of the biggest progresses we've made is helping businesses apply through loans and funding digitally so they can go online, apply for a loan, and we just allowed clients to be able to open accounts through e-sign. So being able to open new prospects through e-sign, and even the ability to close loans. So end-to-end close loans through e-sign as well. So those two capabilities allow the clients to run their business. They don't have to stop what they're doing and go reach out to a banker or walk into a branch. They can actually manage that digitally themselves, open an accounts and the ability to apply and fund loans.



Chana Schoenberger:
Just do it right on their phone?



Scott Stearsman:
Through digital, through their computer, not through their mobile device yet.



Chana Schoenberger:
Okay, okay. But still they're sitting in front of their computers all day anyway, so that's super helpful.



Scott Stearsman:
That's right.



Chana Schoenberger:
This is an interesting thing because it was really during the pandemic, during the PPP loans period that things really started to go digital for business banking. And one of the interesting thing that happened to banks is that they suddenly acquired all these customers that wanted PPP loans. They were able to hook them up with these government loans and then suddenly they had those customers. So how are you working with the customers you acquired during PPP?



Scott Stearsman:
It is a great question, and in fact it's all built on trust and through that process we were able to really establish trust with our small business clients. They were going through a period of time where they needed help, they needed liquidity to be able to keep their businesses running. The banks stepped in at that time were able to assist them through that period. In that process, we built a great relationship with those clients and so, we maintain a relationship with them today, helping them not only with the funding and the loan aspect of it, but also other aspects of their banking, treasury, depository, etc. So it's been a great relationship because we've seen actually the loyalty from those PPP clients stay with us.



Chana Schoenberger:
So you're seeing companies or businesses that started as just PPP clients that are now doing other things with you as well?



Scott Stearsman:
Yeah, and they had to have a relationship with us to have the PPP capability. So we already had that relationship. They started that relationship and we've just fostered that over time.



Chana Schoenberger:
That's great. Okay. So how do small business customers choose a bank and what is the pitch for picking a regional bank like you versus a very local or a very big bank?



Scott Stearsman:
We feel like the value proposition for a client choosing a bank like Truist is ease. Ease of doing business, removing friction from that experience for the client's access. So convenience, do we have the digital capabilities, but do we also have the local presence to be able to have clients walk in into a branch if they need? And then expertise, do we have the capabilities to provide the access and the expertise and the advice that our clients need when they think about growing their business.



Chana Schoenberger:
Got it. Okay, cool. So we're all here this week to discuss small business banking, what it's like to be a small business banker, how to do it better. What are the big issues that you see facing small business clients today?



Scott Stearsman:
Yeah, it's a challenging environment for our small businesses. We see the economic pressures remain for small businesses, access to capital, borrowing costs have gone up, so access to capital is certainly top of mind for small businesses. We also see the challenge of hiring talent and labor that continues to be persistent, it's ebbed and flowed, but we continue to see that challenge for small businesses. The way that we can continue to help is to be that advice and resource for small businesses. How do they help them run their business, manage their business through these turbulent times?



Chana Schoenberger:
So are you hearing a lot about inflation when you talk to these clients?



Scott Stearsman:
Less about inflation. Most recently, I would say six months ago it was heavy inflation. Today it's just about higher borrowing costs. The access to capital, labor continues to be persistent as well.



Chana Schoenberger:
Alright, well it sounds like that's exactly what the Fed wanted. So way to go, Chairman Powell. Any other exciting things? What's the coolest thing you've seen here so far? I know you just got here.



Scott Stearsman:
Yeah, look, the best part is being able to network with your peer banks and the commonality of all of these individuals, really purpose-driven to be able to help small businesses. Everyone here is centered around how can we help small businesses. Small businesses are the lifeblood of our economy and they make things go. And the great thing about being here with this group of bankers is there's this sense of purpose and being here to help our small businesses succeed.



Chana Schoenberger:
Awesome. Well, thank you very much, Scott. I appreciate you coming on stage with me.



Scott Stearsman:
Thank you. It was great being here.



Chana Schoenberger:
Enjoy the rest of the conference.



Scott Stearsman:
I will. Thank you.