The Covid-19 pandemic has rapidly digitized countless aspects of our everyday lives. It may have felt like the only thing that spiked was the frequency of our Zoom happy hours. But digital banks saw sudden surges, too, buoyed by the needs of small businesses for services outside a brick-and-mortar branch. 

Danielle Kane, Director of Small Business Banking at Grasshopper Bank, argues that many traditional banks weren’t prepared for a sudden shock like a pandemic, and couldn’t help their business clients with bookkeeping, bill payments, or other elemental needs without face-to-face assistance. “It's more of a cashless world now, and banks need to better suit them that way,” she said. 

In an interview with The Financial Revolutionist, Kane explains Grasshopper’s lean partnership model, describes how small businesses can operate like consumers, and hints at the bank’s long-term goals. 

This interview has been edited for length and clarity.

The Financial Revolutionist: What does Grasshopper Bank do?

Danielle Kane: Grasshopper is a digital bank for the business and innovation economy. We're really a technology company with a banking charter, and we give digital banking needs to our customers that are not met from other traditional banks.

What do you do at Grasshopper?

My specialty is digital marketing, specifically for financial services. I joined the team in October to help rebuild the bank, which we relaunched on March 1st. I then became the director of SMB banking—I am now in charge of acquisition, the portfolio, and enhancing it for small businesses.

What do you mean by rebuild and relaunch?

In November 2021, we switched to a brand new banking core, FIS. From November to March, we completely rebuilt the bank. On top of that, we've got Treasury Prime APIs for SMB digital account opening and Banking-as-a-Service, Narmi for the SMB online and mobile banking user experience, we brought on Alloy for KYC and transaction monitoring, Hummingbird for compliance. We've built out this large tech stack to better serve the business and innovation economy. This new tech stack allows us to personalize these products, and allows us to go to market for the ever-changing needs of small businesses. 

Mike Butler took over as CEO in May 2021, and I previously worked with him at Radius Bank as well. He really is all for the partnership model—it makes total sense. You can't do it all alone. These partners of ours are award-winning, best in industry. Grasshopper used to exclusively do banking for venture capital and portfolio companies; with our relaunch and because of our tech stack, we’re able to expand into other channels. 

With that in mind, and given your directorship, how do you reach out to SMBs in general, and what sorts of channels work best to communicate how Grasshopper can be of help to them?

The consumer behavior behind someone needing a new small business bank account comes down to the fact that they're unhappy with their current bank and the digital tools that they're providing, and so they're actively looking for better solutions. Opposition-wise, the best way to get to learn about anything is Google. So we're really trying the SEO approach of working with affiliates to get our name out there for people in the online Google search market. You're not going to open a bank account from seeing a paid social ad—it's just not the same as consumer behavior behind retail banking.

Is that just because there are so many stakeholders involved in the business? That is, they need to have already made the decision to be looking for a new account to actually get anywhere?

There's a lot of friction as well as pain points in moving from one bank account to another, so they really have to be actively searching for a bank. I think these past couple of years and the pandemic have been a big trigger for these small businesses to look for better options. They’re switching from these traditional banks to online ones, or to fintechs that better serve them. 

What in particular about the pandemic highlighted that tech inadequacy—PPP loans, the sudden need to adapt to e-commerce, or something else?

A lot of small business banks are branches, and people couldn't go in and get their business done in the branch. These banks also can be very slow to bring out new digital tools to the market. There was a time where they were at a standstill of not having cost cash flow management systems, or bill payments. 

Being a digital bank, Grasshopper doesn’t need you to go to a branch: You can do everything on your phone, you can do everything online, you can automate bookkeeping, you can send bill payments in a couple clicks, you can get SBA lending. The needs of SMBs are more met digitally right now, and the pandemic just sped up the adoption to that.

What have you learned about small businesses over the course of your time at Grasshopper, and in general over the course of your marketing career?

Although SMBs are businesses, they're also consumers. I grew up with parents who own a small business, and I’d come home to the kitchen table full of bank statements and checkbooks. What we need to do as a digital bank is to make digital transformation digestible and to let small businesses know that there are solutions out there that don't need you to be an accountant: You don't need to major in finance to embrace these technologies and make your life easier.

It must have been a tough call to rebuild Grasshopper. How did that kind of culture or humility come about? 

It came from the top down. Mike Butler loves cross-functional culture: The idea is to have fewer one-on-one meetings and have a more open conversation. We all get together and have different minds, different people thinking about ways to improve the product. 

Where do you see Grasshopper five years from now?

Five years is a long time in digital banking. I can't predict what the new trends are going to be five years from now. But we've built our tech stack to let us address whatever needs there are for small businesses. As a whole, five years from now, we'll be able to be the first to market for those needs.