Oct 3, 2023

How Banks Can Compete in a Shifting Landscape: It’s About More Than Just Interest Rates

How Banks Can Compete in a Shifting Landscape: It’s About More Than Just Interest Rates

Like these runners, banks need to compete for your business. Who wins depends on several factors.
Like these runners, banks need to compete for your business. Who wins depends on several factors.
Like these runners, banks need to compete for your business. Who wins depends on several factors.

In today's rapidly changing financial landscape, banks are under unprecedented pressure to compete—not just on interest rates, but on a much broader set of value propositions. The survival rate for banks in this competitive market depends on their ability to innovate beyond traditional banking services. While offering competitive interest rates will always remain a key factor, it’s no longer enough to secure long-term success.  

Many nontraditional financial services firms have entered the market, and the need for banks to diversify by providing new kinds of value to their business customers has become essential. Tools like LiquidTrust.io are helping banks achieve that goal by making the higher volume, lower dollar international transactions they seek safer, more secure and far more cost effective.  

For banks, that’s particularly good news because the services LiquidTrust offers can be bundled in a completely brand-agnostic manner to be offered as part of your own online banking backend with ease.  

If You Are Competing Only On Price: Who Wins?  

Some industries can succeed when competing purely on price—discount retailers or low-cost airlines come to mind. For these businesses, their value proposition is directly tied to their ability to offer lower prices than the competition. While this model can drive significant volume, it often comes at the cost of long-term customer loyalty, margin pressure, and commoditization.  

When applied to the banking industry, competing on price alone by offering the lowest interest rates and cheapest fees can lead to a race to the bottom. Banks that focus solely on price miss out on opportunities to differentiate themselves through superior service, innovative products, or deeper customer relationships and many of the other aspects of a banking relationship that SMBs often value even more than a fee schedule. Again competing on price may attract customers in the short term, but by itself that’s not a sustainable long-term strategy for survival.  

Thriving by Competing on Value  

The banks that will thrive are those that can evolve beyond price-driven competition and offer real, measurable value to their clients. For business customers, especially SMBs, the value comes from partnerships with financial institutions that understand their unique challenges and provide tailored solutions to help them grow.  

Here’s where innovative platforms like LiquidTrust.io have real value. By providing advanced tools for global payments with built in risk management, banks can demonstrate their desire to enhance the efficiency and scalability of SMBs for their owners. These solutions go beyond simple financial products and into areas that help businesses streamline their operations, optimize cash flow, and even expand into new markets.  

Opening New Markets for Your Business Customers  

Imagine the impact of helping your business clients tap into entirely new markets by offering them the opportunity to send funds to more than 100 countries seamlessly, with protections similar to escrow baked in to a simple point-and-click payment process. Whether it's offering better global payment solutions, like those provided by LiquidTrust.io, or creating financing options that make it easier for SMBs to scale internationally, banks have the power to unlock growth potential for their customers. In turn, this deeper relationship not only helps the customer thrive but also creates more opportunities for banks to serve their evolving needs.  

The future of banking is in offering comprehensive solutions that help business customers thrive, rather than competing solely on price. Banks that continue to rely on interest rates as their primary competitive differentiator will struggle to survive in an increasingly dynamic and competitive business landscape that is now dominated by the larger forces of globalization and digital innovation.