From The Future is Here for Commercial and Small Business Transformation, a webinar presented by Curinos on March 5 that featured Margarita Vacanti, SVP, Commercial Banking and managing directors Peter Serene and Bob Warnock.
Business banking is entering a new phase of competition as traditional banks, fintechs, private credit providers and emerging digital finance ecosystems all target the same small business and commercial clients. In this environment, banks that succeed will be those that proactively acquire clients, anchor relationships through lending and align products, distribution and pricing to deepen relationships and maintain profitability.
In this webinar, our panelists examined the transformation that commercial and small business banking finds itself in and tackled the central question of where commercial bankers should be placing their bets in pursuit of profitable growth. Here are some of the key takeaways:
1. The business banking battleground is intensifying.
Competition for small business and commercial relationships has reached a new level. Traditional banks, fintech challengers, private credit players and even emerging digital money ecosystems are all targeting the same client segments. This surge of competitors is fueling rapid innovation in lending, payments and treasury services. As a result, the traditional advantage banks once held in these relationships is narrowing quickly. Banks that win will be those able to capture new relationships, deepen them across multiple products and price them with discipline to ensure profitability.
Disruptors with Segment-Specific Value Propositions
Source: Curinos Analysis | Chime | Mercury | Brex | J.P. Morgan | Citibank
2. Commercial banking has become a key deposit growth engine.
Regional banks increasingly rely on commercial clients to drive deposit growth as consumer deposit expansion slows. In 2025, commercial deposits grew 4.5%, outperforming consumer deposits, which grew only 1.4%. This shift reflects structural changes in retail banking, including disintermediation by digital banks and fintech platforms. For many institutions, business banking has become the most reliable path to balance sheet expansion. But this growth opportunity has also attracted more competitors into the sector, particularly in the small business segment, where deposit growth has been more sluggish.
Average YTD Deposit Growth | December 2025
Source(s): Curinos Analyzer
3. Deposit economics have changed structurally.
The profitability of commercial deposits has shifted significantly during the interest rate cycle. Non-interest-bearing balances have declined sharply as clients migrate to higher-yield alternatives. Even as interest rates have fallen, those balances haven’t returned to historical levels. In December 2025, more than one-third of commercial deposits were priced above 300 basis points, reflecting sustained cost pressures. Banks have to now operate in a structurally higher cost-of-funds environment.
Commercial Deposit Portfolio Rate and Mix: 2/22 to 12/25
Source(s): Curinos Commercial Analyzer (All LOBs), Curinos Commercial Analyzer Executive Summary
4. Small business deposits remain valuable—but harder to win.
Small business banking remains attractive because of its historically high share of non-interest-bearing balances. But the economics of the segment are also shifting. Non-interest-bearing balances have declined from roughly 70% to 56% of small business deposit portfolios over the past few years. At the same time, acquisition rates on interest-bearing products are rising quickly. This means banks need to rethink how they capture and retain these deposits.
Small Business Deposit Portfolio Mix – 1/23 to 12/25
Source(s): Curinos Small Business Analyzer
5. Traditional customer acquisition channels are weakening.
Branch-based acquisition has declined significantly across the industry. In the last five years, monthly new-to-bank small business checking sales per branch have dropped 22% at super-regional banks and 26% at regionals. Relationships simply no longer walk through the door, which is why banks need to adopt more proactive strategies such as digital acquisition, specialized relationship managers and outbound sales teams. Winning in the future will require intentional distribution strategies tailored to each segment.
Branch Small Business New-to-Bank Checking Sales
per Branch per Month
Commercial Corollary
Growth in private credit as “first choice lender” has forced banks to lead with payments and liquidity solutions more of the time.
Source: Curinos Distribution Analyzer
6. In small business, lending relationships drive long-term deposit value.
Deposits alone rarely anchor a durable small business relationship. Small businesses that lend with an institution generate significantly more deposits over time than those that don’t. After three years, clients with a lending relationship hold 2.3× more deposits than those without one. It’s clear that lending acts as the anchor for the broader banking relationship, and banks that treat deposits and lending as integrated strategies will outperform those that pursue deposits alone.
Customer-Level Deposits with vs. without Lending Relationship
Source(s): Curinos Analysis | Curinos 2023 US Business Banking Survey (N = 2,640)
Note(s): Disguised analysis for customers opening their first account between 3/1/19 and 4/30/21; Results averaged across resulting monthly vintages. Excludes customers with >$5mm in deposit balances.
7. Winning banks align products, distribution and pricing.
The banks that excel in business banking excel in three interconnected areas. First, they build distinctive product capabilities tailored to specific customer segments. Second, they deploy specialized distribution channels to reach those clients effectively. Third, they implement disciplined relationship pricing strategies to ensure profitability across deposits, lending and treasury services. But all three of these elements are in flux. They need to work together harder than ever to capture, deepen and profit from business client relationships.
Winning Business Relationships: Key Dimensions of Excellence
