The blurred lines of business banking

Written by Michael Abare Principal Product Manager
The blurred lines of business banking

This is the second of a 4-part business banking series. You can read the original article, featured in the Credit Union Times, here.

As digital technology advances, the line between small business banking and a traditional cash management solution is merging.

Banks and credit unions with assets at approximately $5B and below, are traditionally considered to be within the “community banking market”. Historically, they have focused on their community through retail banking, local experiences, and supporting small business owners achieve their dreams. However, many credit unions and community banks have struggled to serve small to medium-sized businesses (SMBs), as they are a vastly diverse group with varying industries, needs, income, and maturity levels.

Now, we are seeing a shift in the strategy. Institutions are expanding their market and services. They are trying to attract larger business, with more sophisticated accounting packages. This is further driving more need for banking services and blurring the line between retail, small business and a full, robust cash management solution.

What is retail banking?
Also known as consumer banking, retail banking focuses on the individual consumer’s needs. Account holder needs to pay an electric bill? No problem. Deposit that birthday check from grandma? Done. Ultimately, retail banking is what most people think about when they hear the word “banking”.

Previously, many small businesses and sole proprietorships would “hide out” on an institutions’ traditional “retail banking solution”. It didn’t quite fit their needs, but it was less costly and most business owners could easily access via their computer.

What is Small-Medium Business (SMB) banking?
An increase in complexity of needs leads us to SMB digital banking. Think of it as retail banking, plus a series of entitlements, complete with ACH/wire capability and approvals. In actuality, it is a bit more robust than that, but for the sake of the example, I have simplified.

What is Cash Management?
When even further complexity is needed, organizations turn to a cash management solution. Cash management refers to the collection and managing of the business’ cash flows. This includes, but is not limited to, predictive reporting on cash coming in and out, ability to access multiple addendums, and streamline payments/collections. Necessary in a large corporation, these services are often overlooked or can prove to be too costly for the smaller businesses.

But, what if a small business could access these tools earlier? Would it provide the additional leverage and scalability they need to propel their venture forward? Could it accelerate their growth?

Now, the lines are beginning to blur. What was once three distinct categories is now becoming a universal business need. According to a recent study conducted by JP Morgan, most businesses already doing banking online but still have a mix of complex cases that still require in-person or phone contact.
As small businesses demand more from their banking experiences, community banks and credit unions will need shift upmarket in their feature set to remain relevant.


Ensure your chosen technology partner is assessing this changing market and is preparing for the future. Banking, especially digital banking, must to evolve in order to address the growing needs of the advancing business market. It is vital to work with a provider that both understands that small business segment is growing and is prepared to support it.

To find out more about Finastra’s business banking solutions, visit the Fusion Digital Banking page.

Written by
Michael Abare

Michael Abare

Principal Product Manager

Michael serves as the Principle Product Manager with a focus on innovative solutions for business banking. He has over 29 years of experience empowering financial institutions to confidently and effectively compete in the mobile and internet banking market, servicing small businesses.

Get in touch
We are here to help your business reach its goals

Contact us