How community banks can better serve & support small businesses | AOBA 2026

Key takeaways

• Community banks are uniquely positioned to support small businesses with localized, relationship-driven services.

• Modern digital tools enable community banks to combine personal service with seamless, omnichannel banking experiences.

• By streamlining digital onboarding and lending processes help small businesses access capital faster and with fewer barriers. 

• Strategic partnerships with fintech providers can extend community banks’ capabilities without losing their human touch.

• Investing in digital innovation today helps community banks remain competitive and deepen long-term small business relationships.

What are the top reasons small businesses fail?

At the Acquire or Be Acquired Conference, Paul Provenzano, VP of Market Development at ebankIT, participated in a FinXTech session on titled “Driving Growth Through Small Businesses” with Laura Broderick, Chief Marketing Officer (CMO) from Abrigo and Derik Sutton CMO from Autobooks.

Together, they explored how community financial institutions (CFIs) can optimize their offerings and become true growth partner for small and medium businesses (SMBs).

The panel started by highlighting a recent Wall Street Journal article¹ that outlined the top ten reasons small businesses fail, and while all ten are worth examining, three stood out as especially familiar to anyone who’s lived the small-business life.

1. Inability to pivot

The first is the inability to pivot, often caused by disruptions that are completely out of the owner’s control such as economic shifts, supply chain issues, or sudden changes in customer behavior.

This makes flexibility essential. Businesses that are overly rigid in their plans often struggle to adapt when reality doesn’t match projections, which is why being conservative with cash-flow expectations and prepared to adjust strategy is critical for survival.

Read more: Crèdit Andorrà's Head of Inovation and Digital Transformation shares insights for a more flexible business model

2. Closed to other perspectives

The second major reason is stubbornness. Being too attached to one’s own perspective and not open to outside input.

Small business owners dramatically increase their chances of success when they surround themselves with the right team, including community banks, legal advisors, accountants, and insurance professionals.

No founder has all the answers, and refusing to listen to experienced partners can isolate a business at the exact moment it needs guidance the most. Community banks, in particular, can play a powerful role here by helping business owners build awareness, challenge assumptions, and function as part of a broader leadership team rather than just a transactional service provider.

3. Trouble getting Capital

The third recurring challenge is trouble accessing capital. The cash gap is real as roughly 85% of businesses earn less than $500,000 annually, making them micro or small businesses with relatively simple but critical financial needs.

These businesses still require payment services, banking, and lending, yet many struggle to clearly understand what they truly need or how to position themselves for funding.

Industries like construction and trades, which are often geographically limited and unlikely to scale beyond a certain size, represent enormous opportunity but only if financial solutions are designed specifically for their realities.

Cash-flow visibility, realistic revenue expectations, and trusted banking relationships can make the difference between running out of runway and staying in the game long enough to succeed.

How community financial institutions can help SMBs

Community financial institutions play a uniquely powerful role in helping small and midsize businesses succeed because they understand that not all capital needs are created equal. There’s a critical distinction between established businesses and Startups.

An established business often needs fast access to capital for unexpected, operational issues such as a pizza shop whose oven suddenly breaks. In those moments, speed is everything, and having a trusted relationship with a community banker can mean the difference between a temporary disruption and a serious revenue loss.

For Startups, the value shifts toward planning and visibility. Community banks can help founders take a longer, more thoughtful view of the first 18–24 months, mapping out realistic expenses, timing cash inflows, and exploring creative sources of capital beyond traditional loans, such as in-kind contributions or equipment financing.

A key point highlighted during the panel was that entrepreneurs will always follow the path of least resistance to solve immediate problems whether it’s getting paid, making payroll, or buying supplies.

Fintech providers have capitalized on this by solving one pain point and then expanding into others, often pulling deposits and relationships away from traditional banks.

Community financial institutions can compete by combining speed, digital convenience, and personalized guidance meeting business owners where they are while keeping the financial relationship fully alive, integrated, and aligned with the long-term health of the business.

How has the financial workflow of small businesses changed over the past 5-10 years?

Over the past five to ten years, small business financial workflows have shifted dramatically from cash and check-based banking to card-driven, digital payment ecosystems.

Previously, banks sat at the center of daily operations, business owners deposited checks, accessed working capital, and paid bills directly through their local branch.

Today, businesses have a multiple of payment choices: cards, ACH, digital wallets, and peer-to-peer platforms, creating opportunities for non-bank providers to insert themselves directly into the payment flow.

Whoever controls how a business gets paid effectively owns the “direct deposit” relationship, which has become the new foundation of the banking relationship. When banks don’t own that entry point, they risk being sidelined while deposits and activity move elsewhere.

At the same time, switching costs have dropped significantly. If a provider creates friction or fails to add value, small business owners can easily replace them. The result is a more fragile banking relationship unless banks evolve.

To remain central, community banks must go beyond transactions and deliver value-added services like cash-flow visibility, forecasting, and insights that help businesses anticipate gaps and make better decisions, creating stickier, more resilient relationships.

What tools and services are required to properly serve businesses? 

Community financial institutions must prioritize simplicity, flexibility, and relevance. Businesses need faster, easier access to small loans with fewer restrictions, more reasonable fees, and streamlined risk requirements that reflect the lower complexity and size of these credits.

Making borrowing easier and more affordable builds trust and long-term loyalty, especially since these owners strongly remember who supported them when capital was needed most.

Moreoever, a one-size-fits-all approach doesn’t work in this segment. Serving a solo design firm looks very different from serving a restaurant or a growing professional services firm.

CFIs need to customize onboarding, credit extensions, and services based on business type, size, employee count, and operating hours. The more tailored and specialized the offering, the better banks can meet businesses at their point of need and deepen the relationship.

Banks should also focus on financial literacy and practical guidance that resonates with how business owners actually run their operations. Consistent, accessible education and marketing can strengthen relationships, differentiate banks from fintech competitors, and position financial institutions as trusted advisors rather than just transactional providers.

Dig deeper:

• One login, multiple accounts: redefining digital banking convenience

• Transforming the commercial banking experience for business clients

• Building a next-level small digital business strategy

   

How should institutions adjust their checking account & lending strategy to help SMBS effectively grow?

Checking accounts are no longer just a place to hold deposits, they must function as a hub for managing a business’s entire financial workflow.

Small business owners now expect a bundled suite of services that includes payments, basic accounting, cash-flow management, and access to flexible credit when needed. Competitors are already delivering this integrated experience, redefining what “business banking” means beyond balances and transactions.

There’s also a major opportunity to serve the business owner holistically, recognizing that many small business owners blur the line between personal and business finances. Institutions that integrate personal banking, small business needs, and even wealth management into a unified relationship can deepen trust, strengthen primacy, and build longer-lasting connections.

What role can technology play in helping FIs acquire new clients?

Technology plays a critical role in small business client acquisition by shaping the very first impression a bank makes.

The account opening experience whether in-branch, digital, or a blend of both sets the tone for the entire relationship. What once took weeks can now be reduced to minutes, allowing business owners to open and fund accounts, and even establish credit, in a single streamlined workflow. Speed, convenience, and immediate usability are essential, especially for entrepreneurs who need to move quickly.

Fintechs have raised the bar by delivering seamless, frictionless experiences that keep small business owners engaged and coming back. Community banks can compete by using technology to eliminate delays, reduce manual steps, and enable instant access to services.

When small business owners can open an account, access funds, and start operating without friction, it builds trust early and makes adoption easier. It turns technology into a powerful driver of growth and long-term relationships.

How can AI help small businesses in banking

AI has the potential to significantly reshape how small businesses operate by automating routine, time-consuming tasks and freeing owners and employees to focus on higher-value activities like growth, revenue generation, and customer relationships.

Rather than eliminating work, technology has historically created new opportunities, and AI is likely to follow that same pattern, enhancing productivity while enabling businesses to reallocate time and talent more strategically.

For small businesses and banks alike, AI can act as an intelligent support layer, offering forecasting, financial analysis, credit insights, and early recommendations without fully replacing human judgment.

Generative AI tools can handle the initial heavy lifting such as drafting credit narratives or analyzing data, allowing people to focus on decision-making and relationship building.

Ultimately, when paired with the trust and empathy that community banks bring to relationships, AI becomes a powerful enabler: reducing friction, improving insights, and strengthening long-term partnerships between banks and the businesses they serve.

The future of small business banking belongs to institutions that embed growth into everyday financial workflows.

Let’s talk about your SMB growth strategy!

With ebankIT, financial institutions can move from being just a “money holder” to being a true financial partner, guiding SMBs, anticipating their needs, and delivering flexible, digital-first solutions.

If you are interested in learning more about our solution, you can visit our booth to see the ebankIT omnichannel digital banking platform in action.