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The Small Business Market Is Expanding But Still Underserved
There are nearly 97 million small and independent businesses operating in the United States today. More than 90 percent earn less than one million dollars in annual revenue. Most are sole proprietors or microbusinesses. They are service providers, contractors, online sellers, and creative professionals.
Despite their size, these customers represent the largest growth opportunity in the industry. However, many community financial institutions still rely on retail or commercial models that do not fit their needs.
Small businesses fall into the gap: too small for treasury, too complex for consumer. As a result, they turn to third parties to fill the void. According to Datos Insights, 65 percent of small businesses now use a fintech app because their bank does not provide the digital functionality they need. Those third parties now own the daily relationship that used to belong to the financial institution.
This is both the challenge and the opportunity. To reclaim relevance, banks must design products that meet everyday business needs inside their digital channels.
Fintech Partnerships Are The Fastest Path to Modernization
The commercial and payments landscape is changing quickly. Datos Insights reports that more than 70 percent of small businesses already work with or plan to work with a fintech for cash management or payments. Disintermediation is accelerating and so is the need for speed.
Banks cannot afford multi-year development cycles. The new reality calls for agile partnerships that help institutions modernize faster than traditional procurement models allow.
Datos recommends a three-part growth strategy for banks and credit unions that want to compete:
- Expand: Acquire new small business customers and broaden product offerings.
- Retain: Deepen relationships by embedding more functionality into core accounts.
- Optimize: Improve pricing and drive non-interest income through value-based solutions.
Forward-thinking institutions are already moving in this direction. Rather than building everything in-house, they are forming fintech partnerships that allow them to deliver meaningful innovation at scale without sacrificing compliance or brand control.
The Future of Small Business Banking is Embedded Into Business Checking
For decades, business checking has been treated as a commodity. That is changing.
Autobooks and its bank partners are proving that when you embed invoicing, payment acceptance, accounting, and access to working capital directly into checking, it becomes something entirely new. It becomes a platform small businesses can actually run their business from.
This evolution creates a daily connection between business owners and their financial institution. Instead of logging into a fintech app, they log into their bank. Instead of moving deposits away, they keep them close.
Banks offering these integrated smart checking experiences are seeing higher balances, deeper engagement, and stronger primacy.
As one banker shared during the webinar:
"Autobooks turned our business checking account from passive to active. We are seeing customers who log in more often, stay longer, and use more products."
Smart checking is no longer just a feature upgrade. It is a strategic shift. It is how banks keep pace with the market, defend deposits, and rebuild business relationships that were once lost to fintech competitors.
Conclusion
The small business banking landscape is undergoing a fundamental reset. The winners will be those who:
- Recognize the growing opportunity in micro and small business segments
- Accelerate modernization through fintech partnerships
- Transform checking accounts into platforms for daily business management
Banks that act now can redefine their role, not as product providers, but as partners in small business success.