US bank offering banking products to State Farm SME clients.
- US Bank offers banking products to State Farm SME insurance clients.
- The deal positions US Bank to compete with digital challengers such as Square and Brex.
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The American bank is now offer banking products to State Farm’s small and medium-sized business (SME) insurance customers. The partnership is to make deposits, loans, digital capabilities and payment solutions available to businesses through State Farm’s nearly 19,000 agents across the country.
More on this: The collaboration between the banking giant and the insurer represents a deepening of a strategic alliance that companies unveiled in March 2020. The alliance began when the US bank agreed to take over State Farm’s credit card book and deposits, as part of the insurer’s decision to pull out of the bank.
The US Bank partnership comes with an important milestone in terms of reach: it pointed out that this was the first time it had offered a wide range of business banking services nationwide, as opposed to its historic footprint in 26 states.
In areas where the US bank lacks branches or ATMs, it operates as a
with mobile and online channels available, through a FAQ section for companies. This also includes making MoneyPass ATMs available to customers.
The overview: The deal is the US bank’s latest move to expand its SMB operations. The banking giant announcement in August it would acquire SME-focused fintech Bento, which offers corporate cards and a billing product. This merger involves combining the Bento line with existing US Bank accounts receivable products.
The opportunity: The latest move, coupled with the Bento deal, represents a broader push by the US bank to attract SME customers. The two developments also position the incumbent favorably to compete with digital challengers, such as:
- Square, who dived in the PME neobank in July 2021 with checking and savings accounts.
- Brex, who offers a corporate bank account, expense tracker, and a corporate card with a sliding rewards scale that allows customers to earn up to eight points for every dollar spent.
- Capital under pressure, a fintech lending to British SMEs expansion in the United States after securing a $ 100 million credit facility.
The US Bank’s partnership with State Farm gives it a potential customer base it can gain through cross-selling the insurer’s agents to SME policyholders, and national reach for its business banking suite.
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