What SMBs Need from Their Bank Now

Datos Insights panelists explain what SMBs need from their bank now: a dedicated segment focus, faster onboarding, connected tools and AI that supports bankers.

Small and medium-sized businesses (SMBs) don’t necessarily leave a bank because the relationship has failed. They leave when the relationship no longer makes it easy to run their business.

In a recent Datos Insights panel discussion on SMB market strategies, bankers and industry leaders agreed that personal service still has a place, but it’s no longer enough on its own. Businesses are under pressure to control costs, improve cash flow and manage a growing collection of financial and operational tools. For their part, banks must reduce that burden.

The opportunity for financial institutions is therefore bigger than adding another feature, as the discussion revealed. The real opportunity is to combine the trust of a banking relationship with the connectivity, speed, and insight SMBs increasingly expect. Doing that well requires a clear strategy: prioritize the segment, understand how customers actually work and make deliberate choices about where to build, partner and invest.

Relationships Matter, but Relevance Wins  

For many banks, the instinctive answer to differentiation is their people. Strong relationship managers and treasury officers remain important, particularly when an SMB client needs advice or faces an unfamiliar challenge. But relationships can’t compensate for products and processes that make routine work harder.

Christine Martin, head of treasury management at EverBank, described the pressure business customers face to meet internal needs, reduce costs, and keep operations moving. They won’t automatically follow a trusted banker to another institution if the new FI can’t support the way they work. For a growing bank, the answer is not to promise everything. Better to be forthright about current capabilities and focus where the institution can offer genuine depth, including selected industry verticals.

“Winners in this space are truly prioritizing [the SMB] segment first,” said Jonathan Kolozsvary, Global Head of Small and Medium Business at Visa.

 Kolozsvary was nodding to the fact that too often, SMBs sit awkwardly between consumer and commercial banking, inheriting whichever platform or service model comes closest to delivering on SMB needs.

But many banks struggle to build a distinctive SMB proposition. That can happen for a few reasons, and one primary cause is when a bank hasn’t decided that SMB customers are a valuable enough segment for dedicated custom solutions.

Mining the SMB vein starts with knowing who SMB customers are. Some small businesses remain hidden in consumer portfolios even though they behave like businesses and need business services. Identifying them before a critical financing, payments or fraud event gives banks a chance to build a relationship at the point when it can deliver the most value.

Watch the Workload

Winning an SMB customer is only the beginning. If onboarding takes months, the bank immediately undermines the promise of a simpler experience. The problem is not always a missing technology platform. Often, it’s the accumulated weight of handoffs, duplicate requests, and internal procedures that were added over time but never reconsidered.

At EverBank, Martin’s team mapped the customer journey to find where the bank was contacting clients or internal departments too often and asking for the same information more than once. That exercise also forced her team to consider the reality of the person completing the work. An SMB may not have a treasury department. The person setting up users and tokens may also be responsible for payroll and accounting.

Josh Vogel, director of treasury management at S&T Bank, reached a similar conclusion. His team had a defined service-level agreement (SLA) and a functioning workflow, but the process had become more important than the outcome. By separating basic reporting and user access from the full treasury implementation, the bank found a way to get essential capabilities into customers’ hands sooner.

“It was more a workflow change for us than a true transformation,” he said.

That’s a useful reminder for institutions waiting for the budget or technology to redesign everything at once. Panelists agreed that meaningful improvements can begin with observing the customer, removing unnecessary friction, and measuring success by elapsed customer time rather than internal task completion.

Connectivity is the New Convenience

The same thinking applies after onboarding. SMBs increasingly expect financial services to connect with the systems where they already manage the business. For some, that means accounting software. For others, it may be a specialized platform for construction, legal services, or another industry. Asking customers to move repeatedly between disconnected tools creates reconciliation work and limits the bank’s view of what the customer needs.

Brandon Kunz of Bottomline argued that banks can compete with much larger institutions by focusing on connectivity. Bringing information such as invoices and cash positions into the banking experience can help owners see what requires attention without assembling the picture themselves. He summarized it, saying, “Create the connections in a fragmented financial world for a business to be able to operate and have all they need in one place.”

This doesn’t mean every bank should build every capability. Kolozsvary framed the decision as knowing where an FI has the right to build and where a trusted partner can do the job better. The goal is a coherent financial operating experience, not ownership of every component. Interoperability allows banks to preserve choice while avoiding a patchwork experience for customers.

Payments illustrate the point. Faster payment options are important, but speed alone is not the differentiator. SMBs also need consistent controls, entitlements, reconciliation, and data across payment types. As Kunz noted, onboarding an employee into many different systems is difficult; unwinding that access when the employee leaves can be worse. A bank that makes payments easier to control and understand can create value that a collection of isolated services never will.

Use AI to Strengthen Human Advice, Not Replace It

AI featured in nearly every panelist’s view of the next big opportunity in B2B payments. AI’s immediate value may be less about a dramatic customer-facing launch, and more about joining together the pieces banks already have.

Internally, AI can help servicing teams find policies and procedures faster, reduce operational effort, and give bankers more time for useful conversations. Externally, it can turn connected financial data into timely guidance on cash flow, receivables, and next steps a business should consider.

Vogel sees the two as complementary rather than competing priorities. His bet combines AI-enabled productivity with more bankers and treasury officers in the market. Better access to knowledge can help those employees prepare faster, reach more clients, and bring more relevant insight into each meeting.

Banks should not assume their customers are waiting. Kunz warned that business owners are already using public AI tools to analyze bank statements and ask questions about cash flow. “Your small businesses are already there. They’re ahead of you,” he said. The challenge is to provide those capabilities in an environment that brings trusted data, banking controls, and business context together.

The strongest SMB strategy will not be the one with the longest feature list. It will be the one that recognizes the segment, removes friction from the important moments, and connects services around how customers operate.

Relationships remain a crucial part of that equation, but they become more valuable when the bank can turn knowledge into action. For institutions willing to focus, observe and choose their investments carefully, the distance between trusted adviser and useful financial partner can finally begin to close.