Strategies and Tools for Banks to Help SMBs Deal with Costly Market Disruptions

Small businesses operate on significantly tighter margins than large enterprises. In today's economic environment, they are less able to absorb additional costs and are more likely to pass them on to consumers. This creates an urgent need for banks to help small business clients strategize ways to offset rising expenses, navigate supply chain disruptions, and manage a tightening credit landscape.

Our panelists will discuss how banks can play a critical role by offering innovative financing options, effective cash management and expense tracking tools, and seamless ecommerce and payment solutions. Together, we'll explore actionable strategies financial institutions can implement to help small businesses maintain stability and growth in a challenging economy.

Transcription:
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 (00:08):
Hello again. I'm Chana Schoenberger. Y'all met me before. We're just going to take a second to introduce this distinguished panel and then we're going to talk about the question on everyone's mind, which is what to do about the economy and your small business clients. So everybody just introduce yourself, say who you are and who you work for.

Candice Caruso (00:28):
Candice Caruso, SBK, Chief Business Banking Officer for WSFS Bank.

Chana Schoenberger (00:38):
Also a former Most Powerful Women in Banking Next honoree. Awesome. Go ahead.

Andrew Davis (00:41):
Andrew Davis. I'm the head of macro research and investment strategies at Bryn Mawr Trust, which is the wealth arm of WSFS Bank.

Jim Fuhrman (00:50):
I'm Jim Fuhrman. I'm IBISWorld's vice president of our commercial banking client service division.

Chana Schoenberger (00:56):
And WSFS is in Pennsylvania.

Candice Caruso (00:58):
Yes, Greater Philadelphia. Certainly we have our roots in Delaware as well. So almost 200 years of being in banking.

Chana Schoenberger (01:07):
You have a big sign, right? When I take Amtrak, don't I pass your big sign somewhere?

Candice Caruso (01:12):
I'm sure you do. We have lots. You will see it on the Schuylkill. If you're from the Philadelphia area, as you're driving into Philadelphia, you'll see us in the skyline. Absolutely.

Chana Schoenberger (01:23):
Right, Philadelphia, places that have worse weather than Hollywood, Florida. Okay. So we're going to be talking about disruptions to the economy, which there have been an awful lot of this year. We can expect more between tariffs, interest rates, general political uncertainty, and the government shutdown. Small business clients are really concerned and banks need to help them. Andrew, do you just want to start off from a macro perspective? Give us the macro look at what exactly bankers are dealing with right now.

Andrew Davis (01:57):
Yeah. I mean, we heard it in the discussions all throughout the day, but the word that really jumps out for 2025 is yet another year of resiliency. Despite everything that we just reviewed, all that uncertainty, what we have seen is the economy is on pace to grow about 1.6% GDP this year. The late assessment at Q3 is about 4%. And so that's in the face of all of this going on. I think for small businesses in particular, there are a few trends that I would call out. The big one is around the consumer. We've been calling it an employment-light expansion because we haven't seen that robust pace of hiring month over month. It's walked down from 200K yesteryear to somewhere less than 50,000. With that, we've seen the unemployment rate tick up, but it's very modest.

(02:58):
I think it's worth peeling back the layers of the onion there because that unemployment rate tick-up is almost entirely contributed by the 16 to 24-year-olds. So it's an interesting backdrop where your mid-level career, high-income household still has jobs and wage growth is about 4%.

Chana Schoenberger (03:19):
That's you guys.

Andrew Davis (03:20):
Yeah, all of you. But I think it's also knowing the small business and which customer segment they're speaking to. Everyone's been talking about the K-shaped economy. The high-income consumer is even getting a little thriftier but continues to spend, while the low-income consumer is maybe relying on those gig economy jobs to keep up with inflation. So that's an interesting data point there. And then the other one is maybe the unsung hero of this expansion in 2025, given all the AI talk that we're seeing, which is productivity. I think the environment is shifting where maybe we're getting piece by piece a little more certainty for the small business, particularly around the Fed going from very restrictive towards supportive. It really is that bend-don't-break economy that we're living in right now in 2025.

Chana Schoenberger (04:12):
Yeah. This question of the bifurcation between the high end and the low end—you see this a lot in financial services. This is why all of the banks and credit unions we talk to increasingly tell us they're trying to focus on wealth management, or they'll say they're trying to have a tighter tie between their wealth division and their commercial banking division. This basically means: let's get the owners of these companies to put all the money they're borrowing with us and invest it. It's an interesting strategy because at the bottom, you see buy now, pay later, which is almost the inverse of that. I'm going to borrow money to pay for groceries and hopefully four weeks from now I'll be able to pay it off. Somehow I'm going to have more money to pay for bananas then and I can't do it now.

Andrew Davis (05:00):
Yeah. I mean, it's something we've been laser-focused on from a macro backdrop. But I do think as far as the fog being lifted a little bit for 2026, consumer confidence is set to tick higher. There are a few structural tailwinds that we have kicking in as we get past this lull right now of the government shutdown.

Chana Schoenberger (05:25):
Are we going to get past it?

Andrew Davis (05:27):
Well, right now it's the second longest, so we'll see if it continues. As far as speculating on that, we're not really sure when it will end. But what we are more sure of is—it's cliché, but—don't fight the Fed. We've been joking: don't fight the data. The Fed's going to start lowering interest rates and that's going to shift and start impacting the real economy, small businesses and consumers alike.

Chana Schoenberger (05:52):
Okay. Jim, from an industry perspective, what verticals have been most disrupted this year and how are small businesses responding?

Jim Fuhrman (06:11):
Andrew mentioned it's yet another year of market disruption. Five years ago it was the supply chain. The constant through this is the characteristic of a small business, which is tight margins and perhaps being able to act a little more nimbly regarding strategic decisions. One industry that stands out, I think it was actually used as an example earlier, is coffee shops. Maybe folks in the room work with coffee shops. There are big national players and smaller, more Main Street players. Doing some research for this, of course, my algorithm on social media picked up on that right away. A video hit my timeline of a small coffee shop where, in an effort to get folks through the door and buy other products, they told people to walk through the doors dancing to get a free coffee.

(07:05):
Now, once you're in the door, of course, there are other products they can sell like snacks. Now even some of those snacks have gotten more expensive with the input costs coming in. Even just anecdotally, I'm seeing on my Main Street coffee shop more homemade, locally sourced, cheaper alternative snacks to offer as ancillary items to the coffee. The coffee industry is one of many, but it's really impacting those tighter-margin businesses. That is certainly something that small businesses are facing. I think coffee input prices have risen about 19% in the last year. So how do you find a way to either pass it along to your customers or get creative and still keep those healthy margins you had before?

Chana Schoenberger (07:52):
I have this theory about the upscaling of everything. Have you noticed that? I feel like when I started working and I came to New York as a very junior reporter—I was working for Forbes Magazine back when that used to be a thing—we had a little bodega next to us. For those who don't live in New York, a bodega is like a convenience store. Often they have a long steam table with salads you can buy by the pound. For five bucks, you could go in there and get a whole plastic clamshell of food. It was enough for a 22-year-old who was completely broke and making nothing. It was romaine lettuce, or iceberg, carrot shavings, little bits of cucumber, and maybe three chickpeas.

(08:36):
That was perfect for five bucks. Now, everybody wants to go to Sweetgreen or Chopt and they want to get a local kale salad. It's got to have jicama and hearts of palm and be as fancy as the food we were eating here for lunch today. That's just an office lunch for people, and that salad is between 16 and 22 dollars. Same people, same food, but the expectations have crept up such that people can't imagine eating a bowl full of iceberg lettuce and calling that lunch anymore. I don't have a question; I'm just stating that.

Jim Fuhrman (09:11):
It's absolutely true. In my mind, pizza should still cost 12 dollars, but we order takeout and the bill comes in at 50 dollars.

Chana Schoenberger (09:19):
And the slice of pizza should be $1.25.

Jim Fuhrman (09:20):
Agreed.

Chana Schoenberger (09:22):
Yeah, that's not happening. When I moved to New York, the subway cost $1.50 and it's about to hit $3. So, Candice, what are you hearing from the business owners who are your clients? What do they think is the most disruptive right now in the economy?

Candice Caruso (09:40):
At WSFS, we leverage surveys and we also have advisory councils at all stages of size and scale for our clients. That could be within our commercial segments or our small business segments. We have the opportunity to really intimately get to know our clients and understand their needs in a variety of different ways. Going back to data, we leverage a lot of that in informing our decision-making. With that being said, they certainly have concerns around tariffs, inflation, and hiring. Hiring is a huge one. Skilled labor is very difficult to come by particularly within our geographic region. We're the largest regional community bank in our area. Within Delaware, Philadelphia, and the suburbs going into New Jersey, there are different needs we've uncovered. Even when you speak to pavers, people paving roads, they've talked to us about the impacts of slower pay now and how the timing of their cash flows is extending.

(10:50):
That's something we lean into. We try to seek solutions like: do you need a larger line of credit? What are those timelines? Also, we have seen that these small business owners are optimistic; they want to be optimistic. They started the year with a really optimistic view overall and they've been weathering the storm. They've been taking in new information and looking at their cash flows. They're consulting with their accountant or CPA, but really most importantly, they're coming back to us as their banker and trusted resource to seek advice. That intimacy that we have with our clients is a key point of differentiation in the marketplace. I know all the products and services we provide are often heavily commoditized, but it's that relationship that is a key difference-maker—keeping your finger on the pulse of what those clients' needs are so that they can inspire new solutions we can introduce.

Chana Schoenberger (11:59):
That's so interesting because the other big trend we're seeing in the last year or two is real-time payments. The payment mechanisms are getting faster, but the businesses are getting paid more slowly.

Candice Caruso (12:12):
Yes. One of the things we've even begun to pull the thread on for smaller businesses is a right-sized cash management introduction: get them onto ACH, get them onto wire, leverage remote check capture—all those things that really speed up their cash flow in a way and at a price point that's palatable to them. What I always say is: we're the incubator. We're the place for those future commercial clients or future private banking clients. We have to be there to introduce them to those solutions, but they have to be affordable and accessible to that client at that stage.

Chana Schoenberger (12:55):
Does that work, by the way? Do you have examples of small businesses that started with the bank and eventually became M&A or commercial or private banking clients?

Candice Caruso (13:06):
We absolutely do. That's super exciting. We had a partnership with one of our clients where we worked with them through all stages of growth and they eventually sold to a private equity firm. We still continue to have that relationship with them. That's just one of the many examples, but that's also one of the key benefits of really being embedded in the communities you serve and having a long-standing, stable history. It is the argument for community banking.

Chana Schoenberger (13:34):
Yeah. So how are you meeting client needs? They call you and need something right now. What do you do?

Candice Caruso (13:41):
Certainly, you need to have a model, you need to have scale, and you need to have consistency in your approach. What we call that is our "trusted advisor" model. We work with our relationship managers to make sure they have the skills and ability to really consult with our clients and meet them where they're at. We also work with our retail office managers. We want to ensure they can be our small business specialists embedded in our branch distribution so they can equally speak to clients, talk to them about lending solutions, and then engage the right partners across the bank. One of the things that I think distinguishes us in the small business space is we have boutique businesses or specialty businesses.

(14:29):
We have SBA as a specialty. We're different than TD; we tend to do higher, more sizable transactions in our region today, but moving more towards diversifying into the smaller dollar. We're a top SBA lender in the PA Eastern and Delaware region, which shows that we can meet clients as they are—perhaps acquiring a new business with less equity injection or less collateral. We understand the needs and have a solution. We also have a new line called Lane Finance, which is an equipment finance business that offers nationwide financing. We have Cash Connect with SmartSafe. We have the standard suite of solutions a client might need for growing, whether it be lending, depository, or treasury management. Most importantly, our wealth solutions. We've been thoughtful in integrating wealth solutions early with clients, whether that be through a 401k or private banking with the business owner.

(15:30):
Those are really important relative to succession planning. One of the things I've been keeping a pulse on is this transition of business ownership and potential wealth. We have baby boomers who, in the next 10 to 15 years, will be transitioning their businesses. About 30% of businesses have a generational transition to that second generation. There are a lot of businesses that begin and end with the current business owner. With those baby boomers coming up—some call it the "silver tsunami"—it is that large in scale. It's 10 trillion dollars that I've been reading over the next 10 to 15 years that could transition into that next generation of wealth, but we have to get ahead of that. Speaking to productivity, what can that next generation of business owners do to drive productivity and rise the profitability of those existing businesses in this modern age with AI or other tools?

Chana Schoenberger (16:41):
Great. Do you guys have any thoughts on how to actually meet the needs of small businesses? I know it's not exactly your thing.

Andrew Davis (16:49):
I'll just chime in. I think a few people have mentioned private equity. Someone joked about the HVAC company, but from a macro perspective, this productivity tailwind is real and it's important to talk to your clients about. What does private equity like? A legacy tech-light HVAC business that they can plug in, get a new tech stack, and away they roll. I think legacy owners need to be cognizant of that. Also, the way we interpret one big bill is that it's incentivizing that full CapEx of R&D and full expensing of R&D. That extends that CapEx cycle. You throw that in the cauldron, add in a Fed that's lowering interest rates—which will lower cost of capital for a lot of small businesses—and we think 2026 is going to be a shift from survival mode into more opportunities. It's not going to be back to "easy money." The 2009 to 2020 time period—you almost need to make sure you're working with your newer bankers and younger employees to understand that's not the way the world is going to look. You can't just solve all your problems with easy money. You need to be focusing on thoughtful solutions and how you are putting money to work.

Chana Schoenberger (18:23):
Even if rates go down.

Andrew Davis (18:25):
Yes, I think so, because even then the Fed's own forecast is that it's going down, but only to 3%, and the small businesses we're lending to are going to be north of that.

Chana Schoenberger (18:36):
Right.

Jim Fuhrman (18:38):
It's a great point about understanding your client at that level. Barlow Research, which has gotten a couple of shout-outs so far, uses a leading indicator they call "sector fluency." Having a relationship manager who demonstrates sector fluency decreases customer churn by 3X. How do you put that into action? This panel is a great microcosm of that. Andrew speaks to the macro level, IBISWorld from an industry perspective, and Candice on the ground speaking with customers. It takes all three of those levels. In a ZIRP environment, money came a little easier. It was easier to get it out the door and perhaps that created some bad habits just in terms of only fixating on the client themselves and having great relationships, but maybe not being able to forecast what exactly was happening in their backyard to make those solution-based observations.

(19:37):
Understanding the multiple layers—go back to your textbooks from business school, Porter's Five Forces—understanding all those different layers is a huge focus that we're hearing more and more about.

Chana Schoenberger (19:48):
I'm picturing everybody going home tomorrow night after the conference and just taking that textbook off the bookshelf like, "Hmm, haven't looked at this in a while," and refamiliarizing themselves with the five forces. Andrew, what are the macro risks banks should be preparing for for the next year to year and a half, and where are the opportunities for growth?

Andrew Davis (20:13):
Yeah, so I've kind of laid out our outlook for 2026. If I was going to bucket the risks, one big one is around confidence. Even though we're talking about being cautiously optimistic, that confidence can be shaken at the consumer level, the small business level, political uncertainty, social unrest, or geopolitics. That confidence is a big one we're going to stay laser-focused on. I think the other one is the maturity wall. For a lot of small businesses, 2020 was five years ago; that lower fixed-rate period is now over and we're entering the variable period. With those risks come opportunities. I think the biggest opportunity is around productivity tailwinds.

(21:13):
Everything we were hearing on stage: you can be more nimble, you can be quicker to market, and you can test and incubate stuff. One gentleman said products are rolling out in days, not weeks. That productivity is real and it's something businesses should be focused on. Any opportunity that bankers can get around that discussion and figure out the financing needs for that is a great opportunity. On the wealth side, tying it in is succession and the baby boomer aging. Being a trusted partner and helping people reach their goals on that is a big way to integrate wealth with the bank.

Chana Schoenberger (21:55):
Right. That's so interesting about the productivity, because when we think about how businesses pivoted so quickly at the beginning of the pandemic—everybody figured out how to do electronic signatures within two weeks—all those things that banks spun up very quickly happened before GenAI. Now everything is different and much faster, but also the risks are greater.

Andrew Davis (22:27):
Adding to that, those last two opportunities I labeled are tied together. Small business owners know we have an aging baby boomer cohort in leadership positions and they might not have that quality of labor. I love the NFIB survey; one of the biggest concerns is quality of labor. How do you solve for that problem? Tech's not a magic bullet, but it can help alleviate pressure and allow you to hit the ground running.

Chana Schoenberger (23:02):
Right, or at least take out the costs you don't want to spend money on.

Andrew Davis (23:05):
Exactly.

Chana Schoenberger (23:07):
Jim, these are all things banks have to adapt to. What risks are banks facing if they don't adapt, and where do you see the most upside?

Jim Fuhrman (23:21):
The risk is missing the opportunity. It's not understanding the market nuances happening around you at a local level. Recently, we were invited to speak at a bank in New Jersey for their semi-annual credit risk review. It's about a 10 billion dollar bank. A big portion of it for us was to demonstrate what's happening in their backyard. Here are some dynamics in New Jersey to be aware of, and particularly some tailwinds that can propel you. A unique characteristic of New Jersey is the large volume of smaller manufacturers in pharmaceuticals and chemicals. Propelling that sector's growth is a large tax credit program to either relocate or refresh systems for clean energy. Starting with the broad macro down to the sector and manufacturing level, the next step—where Candice and her team really get into it—is understanding what makes the industry tick and skilling up bankers to go out and speak with businesses in the space.

(24:36):
The risk is letting this time pass you by with inaction when all around you there's information and things propelling loan growth. Optimism is growing and it's important to jump on earlier to build that pipeline.

Chana Schoenberger (24:50):
That makes sense. Candice, as you're thinking about your teams of bankers, how do you get them ready to take advantage of these opportunities? What does that look like?

Candice Caruso (25:03):
As I alluded to, with the "trusted advisor" model, we've not only invested in upskilling to build out their acumen and help them have natural conversations, but also in consistent sales practices—to not lead with product, but lead with solutions and relationships. Customers don't care about your product. My team knows that. I say, "Don't talk to me about a product; talk to me about what the relationship looks like." The product will organically present itself through that consultation. It's done in a way that's evergreen; we continue to invest in it and continue to listen to our clients. We continue to go back to those bankers with education, whether it be through weekly learning bites or other opportunities.

(25:59):
Often people make investments in education in the banking space and aren't sure if it will have a return. We've built out Salesforce dashboards that identify how this is driving real results and success. One, so we can continue to invest in it, but two, it informs us. It's the data that tells us what our clients' needs are and the behaviors driving those needs. You can sort by vertical or product need. We can have more intelligent marketing campaigns geared towards those clients' behaviors to further support that trusted advisor approach. This requires a lot of partnership between the business line, product team, sales enablement, and technology. Delivery is not just through the human element; there's a convergence of tech and people. Credit-oriented speed and quick delivery is still key, so we want to leverage tech in the right places while ensuring we are responding to that client's particular needs. This data approach is helping us deepen those client relationships.

Jim Fuhrman (27:31):
The Trusted Advisor Program Candice has told me about is so impressive—one, for the commitment and the roadmap to skill up bankers on an ongoing basis. It's a phased approach with a long shelf life. But it's also about overcoming the fear of taking staff off the floor to upskill them—investing in taking people away from the phones to triple down on knowing what it means to be an advisor.

Candice Caruso (28:01):
Part of that is investing in credit acumen—getting our frontline bankers comfortable with having a conversation around credit. They don't always have to go immediately to a relationship manager on my team. They can navigate a bit of that and then, at the right time, have a joint appointment that's really impactful. The client feels really valued and heard.

Jim Fuhrman (28:29):
A debate we were having leading up to this was: when is it time to specialize within a vertical? When is a bank big enough? I've spoken with a few credit unions at a billion dollars who are already trying to go down this path. Candice, as a 20 billion dollar bank, it's been a five-year roadmap to start building out these verticals. I'm always curious to hear where folks are on their journey because it can happen at different asset sizes and through mergers or what have you.

Chana Schoenberger (29:10):
How do you pick what you're going to specialize in?

Candice Caruso (29:14):
That's a great question you have to self-reflect on at your institution: where do you have specialists and deep connections, not just with clients but with COIs and trade organizations? Where do you add the most value? We have a variety of different vertical focuses, one being franchise lending. We have deep networks there and it fits really well with SBA. It's a very vertically focused strategy. It also fits with some of our national businesses like Lane Equipment Finance or Cash Connect. We also have wealth opportunities in professional services like CPAs. As I spoke about that wave of succession planning, there are younger doctors, dentists, CPAs, and attorneys coming into business for themselves.

(30:15):
Often they graduate school with a lot of debt, but they are those "HENRYs"—High Earners, Not Rich Yet.

Chana Schoenberger (30:23):
High earners, not rich yet.

Candice Caruso (30:25):
Yes.

Chana Schoenberger (30:27):
So they're a great shared vertical for us to focus on with our private bankers and wealth team. You have to know your audience, know where you're specialized, and know where you're going to win.

Chana Schoenberger (30:39):
Yeah, that's always a good strategy. One of the big private banks would go to all the associates at big white-shoe law firms and say, "Hey, you don't even remotely qualify right now, but we're going to give you all accounts and then chances are you're going to be sticky." In fact, that's what happens; these people grow into partners or leave and become general counsels and they still have these private bank accounts. Eventually, it's worth the bank's time.

Candice Caruso (31:08):
But you have to be long-sighted. Early-stage winnings take 20 years.

Andrew Davis (31:13):
Exactly. And you need measurable insights—peeling back the layer on NPS or brand loyalty. If you can drive that, you can have a longer time horizon on these initiatives.

Chana Schoenberger (31:27):
This is probably where it also helps to be a deeply rooted community bank. Even if you're a national bank, if you're rooted in a community, there's something about that community it does well and that could be a thing to specialize in.

Candice Caruso (31:42):
Absolutely.

Chana Schoenberger (31:43):
A particular industry, or maybe everybody's obsessed with ice fishing and they all want to buy a snowmobile and need to finance it.

Candice Caruso (31:51):
Yeah, and there has to be a time commitment you put into thought leadership with those trade organizations and being out in the field to build the brand—a brand within the brand.

Chana Schoenberger (32:10):
Got it. Let's look forward in our last few minutes. In 2026, how is fiscal policy going to shape conditions? The Genius Act just passed, so that's going to change what happens with crypto. Candice, from a bank's perspective, what client needs are you seeing? For instance, rate cuts.

Candice Caruso (32:38):
Rate cuts for certain are the perfect call to action for all this pent-up demand. I believe there's a ton of pent-up demand within small business nationwide.

Chana Schoenberger (32:52):
So they would expand if they could borrow at a good rate.

Candice Caruso (32:55):
If they could borrow at an affordable rate. It doesn't have to be the best rate, but it has to be a rate they can manage that allows them to continue to cash flow, build, and get the right return on investment. This declining-rate environment is building momentum in our lending pipelines. The cycles are longer because they want more certainty and are trying to figure out the right time. They're also anticipating that rates will continue to calm down, so they wonder: when should I seize this opportunity? It also depends on the product. If it's a variable loan, it's going to come down along with the market. If it's a longer-term horizon—buying an office building or a piece of equipment—they're being more thoughtful. It's much more competitive particularly in the region we serve.

(34:12):
It's the oldest section of the United States, so there's a lot of saturation. You have to stay ahead of it and continue those conversations. Ultimately, I believe that pent-up demand will lead to more borrowing as we trend into next year.

Andrew Davis (34:31):
The Genius Act is very interesting. As a macro driver, we're trying to wrap our heads around it. For banks in general, it is important because we heard one of the issues is around speed. Time will tell if digitization delivers on that promise. I think it's important for banks to understand what the rails look like that it's being built on. Understanding which rails were built on allowed all those AI companies to bubble up. That's something worth watching as we move into 2026.

Chana Schoenberger (35:23):
Yeah. It'll be interesting to see how small businesses adopt those provisions. There's been this theory that stablecoin is really good for cross-border payments. Some percentage of small businesses are doing that, and I'll be interested to see if they start using stablecoin for it.

Candice Caruso (35:42):
We're trending that as well. We have a capital markets team that looks for those international-type businesses. With the SBA and other programs, it's about generating stimulus and giving our economy an accelerant to move faster. I'm curious to see how that plays out. The complexity of it is important because we talked about the simplicity required for small businesses to achieve. If it is too complex, it may create a barrier to receiving those benefits.

Chana Schoenberger (36:25):
Right. And if it does take off, financial institutions that were making money from those payments will no longer be making money. I guess we're going to find out. Jim, in terms of portfolio dynamics, how should banks think about growth against portfolio runoff?

Jim Fuhrman (36:56):
What we're hearing from clients is optimism around loan growth and how to capitalize on it. If we surveyed 10 clients, seven would agree that investing time in C&I (Commercial and Industrial) lending is a big focus. About two out of 10 will have a formal structured plan behind it. Growth means something different for every bank and credit union, but C&I is definitely an area of focus. The average bank today has between 13 and 15% of their portfolio concentrated there. We anticipate growth in the C&I space, but it takes work. These are the stickier relationships that take more time and investment. There are no simple check-ins.

(37:52):
You've got to show up and "knock with your elbows" because you're always holding something valuable in your hands. Getting closer to the operational relationship is the goal; it's how you achieve more of that wallet share. The average small-to-medium-sized business has about nine products they're using—seven of which tend to be with the primary bank, while two are with a secondary or even third bank. It's a moment of reflection: where do your clients stand regarding wallet share? What inroads do you have to increase that? We see C&I lending as a portfolio dynamic to focus on.

Chana Schoenberger (38:39):
Great. We're totally out of time. Super quick lightning round: one piece of advice you have for banks regarding small business banking.

Candice Caruso (38:51):
Don't forget about relationships. Technology is important to drive efficiency, but relationships are what are going to allow you to win.

Andrew Davis (39:00):
Specialize on your core competency and make sure you're adopting a brand-love image in that area. That flywheel clicking can lead to more and more relationships.

Jim Fuhrman (39:18):
Own what it means to understand your customer from the macro to the sector.