Insights and Advice from your Community Banker: Sean McCabe

We have seen the Federal Reserve adopt a “higher for longer” view to short-term interest rates this year, meaning they have remained higher for longer than expected, despite initial expectations that rates would come down. This means that high rates are still available for customers with excess liquidity, either in traditional bank products or more investment options. Higher rates mean more options for business owners but also requires them to think carefully about how to deploy their cash: how much is needed to run short term business operations, how much of the excess cash needs to remain liquid versus a CD, versus a long term investment account? The goal of our relationship managers is to help business owners evaluate their options and find the right solutions for their liquidity needs.

Small business owners are faced with a host of challenges in the current environment. Tariffs have impacted both their input costs as well as pricing to their customers. Labor costs, utilities, rents, and other basic operating costs have increased across the board. More than ever businesses need tools to manage timing mismatches between when the business gets paid and when they need to pay their bills. Small businesses typically have less of a safety net than larger middle market firms to manage through these challenges.

Setting aside a small pool of liquid balances in a savings vehicle or accessing a line of credit to smooth over temporary liquidity needs are simple ways a trusted bank could help businesses prepare for uncertainty. We also offer different payment or invoicing options to allow business owners to speed up their receivables collection.

I think the next wave of deposit innovation is to make it simpler for business owners to manage their cash flow with the deposit account at the heart of that need. The core products and services businesses need to run like checking accounts, merchant services and payment acceptance, cash management capabilities via treasury management, fraud protection services, etc., are fragmented experiences for business owners in the banking ecosystems. The future is bringing these services together for customers. Combining these products and services with the core checking account, making access and onboarding easier, creating packages to bring down the individual cost of these services and make them more accessible, and providing customers meaningful value to power their daily business activity will be a key differentiator in the near future.

In spaces where the offerings and rates often feel commoditized, you either differentiate yourself with relationships or with services that make life easier for the business owner. The ability to bring big bank capabilities and decision-making to the local community is what separates regional banks from larger national competitors or FinTechs. Regional banks, and M&T in particular, have the full suite of cash management, credit, and deposit solutions that customers need. These services are delivered locally, where our branch and business relationship managers act as trusted advisors to our business customers. The other way to differentiate yourself from the pack is to provide a practical banking solution to everyday customer problems. A good example of this is the Nota banking and account reconciliation platform we designed specifically for attorneys. The platform combines everyday digital banking and payments capabilities alongside trust account segregation and reconciliation tools. Time is a precious commodity for business owners and the Nota platform is designed to simplify attorney banking and allow the private practice attorney more time to serve their customers.

We hope that our customers look back on this period and are able to say that they had the advice, guidance, and services they needed to help them run their business during uncertain times. At M&T, we pride ourselves on being servants of the communities we are in – in good times and bad. Whether it’s today, tomorrow, the Great Financial Crisis, or the Pandemic, M&T has been there to meet the needs of our clients offering consistent access to credit, short term working capital lines and cash management services.