Winning Small Business loyalty in the age of Neobanks

Transcript 

00:00:00  - Introduction and line-up for the session

The webinar, "Winning Small Business Loyalty in the Age of Neobanks," opens by acknowledging the growing competitive pressures faced by community financial institutions. With fintechs and neobanks offering sleek, modern digital experiences, many traditional institutions are struggling due to outdated product structures, rigid service models, and legacy technology. The session promises to unpack common strategic missteps and provide actionable steps to help institutions regain relevance with small business customers.

Katherine Tracy, Director of Business Development at Bank Director, welcomes the webinar attendees and introduces ebankIT, A digital banking platform provider offering customizable omnichannel solutions for retail, SMB, and commercial clients. Their strengths include advanced self‑service onboarding, payment management, multi-layer controls, financial insights, and multi-entity banking.

She then introduces the three speakers from ebankIT. Pedro Azevedo, Chief Product Officer, who is experienced in digital banking transformations in Europe and North America; now leading the ebankIT omnichannel product. Paul Provenzano, VP of Market Development who brings 25+ years of experience in digital banking and payments; guiding ebankIT’s U.S. expansion and digital transformation strategies. And finally, Jerry Reese, Senior Solutions Engineer with over 20 years in financial institutions, including as head of digital banking, specializes in helping institutions transition to API‑first omnichannel systems. 

00:05:00  - The rapid rise of neobanks 

Paul opens the main content by thanking attendees and framing the session’s core topic: helping community financial institutions win small business loyalty in an increasingly competitive landscape dominated by neobanks. He highlights the rapid rise of neobanks in recent years and their digital‑only model as a fundamental advantage. The importance of understanding how this digital‑native approach impacts customer expectations and market share.

Paul continues by explaining that neobanks approach financial services with the mindset and characteristics of modern digital‑first e‑commerce companies like Amazon, Uber, or Netflix. Their foundation is built on user experience, which drives their investment and product decisions. This digital‑native perspective allows neobanks to create smoother, more intuitive interactions that increasingly attract small business customers.

Paul references current research and market trends and stresses three main insights.

1. Digital experience is a top priority for small business owners.
Ease of use, seamless navigation, and the ability to handle tasks quickly and intuitively are major drivers of satisfaction and loyalty.

2. Neobanks excel at delivering superior experiences.
Their offerings often go beyond basic banking and incorporate value‑added features like financial insights, automation, and intelligent tools that support business decisions.

3. Account switching
Small businesses are willing to move if another provider offers a better digital experience.

He also metions a JD Power datapoint emphasizes that small business owners prefer to keep their personal and business accounts with the same institution, which presents an opportunity traditional banks have not fully leveraged due to often siloed strategies between retail and business segments.

Paul outlines the structure of the discussion with Pedro and Jerry:

1. Foundation: Understanding the basics that are currently eroding trust in traditional small business banking relationships.

2. The Battleground: What now constitutes "table stakes" in digital experience, and how expectations have shifted.

3. The Future: What winning small business loyalty and achieving primacy could look like for institutions going forward.

Paul then invites Pedro and Jerry into the conversation, thanking them for their expertise. Pedro explains that the biggest threat is not only neobanks themselves, but also what their success reveals.  There are still a lot of product gaps at community banks. Business banking at many traditional institutions is still a fragmented set of parts: accounts, payments, treasury, loosely connected and lacking cohesion. Neobanks, by contrast, deliver an integrated, seamless offering that better addresses what businesses need today.

00:10:00  - Traditional business‑banking setups no longer work

Pedro continues by explaining that traditional business‑banking setups: collections of loosely connected accounts, payments, and treasury tools, worked for many years but now feel slow, fragmented, and outdated compared to the seamlessness of modern digital products outside banking.

He highlights that Neobanks remove friction. They offer rapid onboarding, immediate access to tools, and cohesive functionality that doesn’t force users to understand internal bank structures.
They provide experience built around the business, not the bank: Neobank interfaces align with how businesses operate, not how banking departments are organized. This set resets account holders' expectations. Once customers experience this speed and integration, it becomes hard to accept friction from traditional banks.

Jerry emphasizes that the greatest competitive threat from neobanks is their speed. They move quickly because they’re not weighed down by legacy cores, fragmented vendor integrations, or slow release cycles. Neobanks can release new onboarding flows or features in weeks, while community banks may take months due to vendor tickets and long roadmaps.
They cut down paperwork, simplify steps, and create an “Amazon‑level” convenience that small businesses immediately notice.

Jerry explains that neobanks’ have an underlying advantage due to their modern architecture that provides speed which comes from their API‑first, cloud‑native platforms. It allows for continuous updates (even daily), a unified and responsive experiences across onboarding, payments, lending, invoicing as well as a shared, integrated data that powers personalization and smooth workflow transitions.  In contrast, community banks try to replicate this by stitching together multiple vendors, which leads to fragmentation, data mismatches and slow change cycles. 

Superior integrations allows Neobanks to connect seamlessly with tools small businesses already rely on such as Stripe, Square, QuickBooks, Shopify, without batch files, manual re-entry or data mismatches. This reduces errors, delays, and operational headaches for both the business and the bank.

Paul summarizes that both perspectives highlight speed to market, fast delivery of functionality and experience aligned with business needs, not bank organizational charts

00:15:00  - Clean and intuitive user interface

Paul asks Jerry to elaborate on additional areas where neobanks excel in user experience, leading Jerry to reinforce that the real “magic” lies in the clean UI supported by a unified, integrated ecosystem, something community banks can only achieve by rethinking their underlying architecture.

Pedro dives deeper into why neobanks excel from a product design standpoint.

1. Hyper-intentional usability: Neobanks design assuming the user is busy, often on the move, not highly technicaland uninterested in reading long instructions. As a result, their interfaces feel obvious, fast and familiar (similar to everyday consumer apps). 

 2. Unified experience: They bring together invoicing, payments, cards, and even personal accounts in one consistent interface. This reduces cognitive load and makes everything feel cohesive.

3. Leading with value and not traditional products: Instead of offering “another type of checking account,” neobanks lead with tools to get paid, tools to pay others, money‑management and operational tools. Their value proposition centers on helping the business run, not selling a banking product.

Neobanks design around business operations rather than banking products, positioning themselves as the digital front door for business tools, extending into invoicing, receivables, and payables, far beyond traditional online banking.

Paul transitions the discussion to what community banks can do beyond digital features. How can community banks differentiate themselves from neobanks beyond just features?

Pedro’s responds that differentiation is beyond features. Features alone will not win. Whatever feature is unique today will be standard tomorrow. Community banks must differentiate elsewhere.

Community banks can differenciate themselves throught advisory-led experiences. Guiding small businesses, through insights, using digital tools to surface what’s happening in the business, helping customers understand trends and “next best actions”. This blends technology with the human‑centric strengths community banks are known for.

00:20:00  - Differentiation by moving beyond features

Pedro expands on the idea that community banks can differentiate themselves by moving beyond features and instead offering genuinely helpful, industry‑specific experiences. He argues that a restaurant, a contractor, or a design firm each has unique advisory needs, and creating digital experiences that reflect those everyday realities makes banking far more relevant. This type of contextual guidance is difficult for neobanks to replicate and gives community banks an opportunity to stand out. Winning is not just about having a polished interface but  it’s about being meaningfully useful in ways that are hard to copy.

Jerry agrees, emphasizing that simply adding more digital features isn’t the answer. The advantage for community banks lies in using the deep data they already have to personalize interactions and provide predictive insights. With the right analytics, banks can proactively identify changes in cash flow, shifts in payment volume, or the need for a credit line increase,  essentially showing up before a problem occurs. That level of anticipation creates a sense of true partnership for small businesses.

Paul highlights the importance of Pedro’s point that businesses differ widely in size, structure, and needs. A two-person lawn care company operates very differently from a twenty-person restaurant or a design firm, and expectations reflect that. He notes that even neobanks are beginning to segment their offerings by industry, targeting groups like medical professionals or gig‑economy workers  which reinforces the value of serving defined business segments with tailored solutions.

The conversation then shifts toward why small businesses are increasingly willing to switch banks, despite the inconvenience. Paul observes that such a move usually signals something fundamentally missing in their current experience. Pedro expands on this by explaining that modern users have little patience for friction after becoming accustomed to intuitive digital tools in areas like accounting, payroll, and e‑commerce.

Delays caused by manual steps, limited visibility, or outdated workflows feel unacceptable, especially when onboarding with a neobank is quick and low‑risk. When neobanks offer real-time cash flow visibility, instant payments, and strong self‑service tools, switching becomes far less daunting and loyalty becomes tied to daily usefulness.

Jerry adds that small businesses are often running at a much faster pace than their banks. They feel the pain of manual processing, repetitive data entry, and multi-day reviews, especially when they’re doing financial tasks after hours or on weekends. Neobanks remove these burdens through automation and unified data architectures, while many community banks still rely on disconnected systems that force users to reenter information and wait for batch jobs.

Small businesses also expect everything in real time:  balances, payments, alerts, and decisions and anything slower feels outdated. Jerry concludes that small businesses aren’t switching out of disloyalty, but because their bank can’t keep up with the speed their business demands.

Paul closes this segment by noting that small business owners often handle their financial tasks outside traditional banking hours, making it essential for banking tools to be efficient, real‑time, and aligned with the rhythm of how entrepreneurs actually work. 

00:30:00  - Strategies and opportunities that community banks

Paul transitions the discussion by reassuring that despite the rise of neobanks, all is not lost for community banks. These institutions still hold a strong position in the communities they serve, grounded in history, relationships, and trust. He shifts the conversation toward strategies and opportunities that community banks can leverage to offer more competitive and compelling solutions.

When asked where community banks continue to have a natural advantage, Pedro underscores the power of advisory services. Community banks possess deep contextual knowledge of their regions, industries, and customers. They understand the real stories behind the financials, which becomes especially important in complex processes like lending.

The key opportunity, he explains, is blending that human insight with strong, unified digital experiences, letting digital channels handle speed and convenience while bankers focus on personalized judgment and advice. This combination creates an experience that is both efficient and personal, and far more difficult for a purely digital neobank to replicate.

Jerry builds on this by reinforcing that community banks sit on rich customer data, far more than any neobank has access to. They can see both the personal and business sides of a customer’s financial life, giving them context neobanks cannot match. He adds that small businesses don’t want everything automated; they want the right mix of automation and human interaction at the right moment.

A banker who knows the customer’s story and local market can step in at critical times, offering value that digital-only providers simply cannot. This ability to serve the full relationship, actual humans plus technology, is a major differentiator in favor of community banks.

Paul agrees, emphasizing that technology should enhance the human relationship, not replace it. That blend of digital capability and personal connection remains a distinct strength for community banks. He then pivots to account opening and onboarding, noting that neobanks excel at making this first impression fast and frictionless precisely because they have no alternative to digital.

For community banks, a cumbersome or confusing onboarding experience can lead to abandonment and a poor first impression. Pedro explains that modern onboarding must feel smooth and low-friction, but achieving that requires eliminating redundant data entry, creating clear and predictable steps, and providing ongoing visibility after submission so customers know where their application stands and what comes next.

More importantly, value should begin immediately after approval. Onboarding shouldn’t be treated as a single event but the beginning of the relationship, with instant access to useful capabilities like payments, virtual cards, or cash flow views.

Jerry reinforces that achieving this kind of onboarding flow depends entirely on the underlying architecture. The core systems, identity services, and KYC checks must be connected in real time rather than through batch processes. An orchestration layer should coordinate each step, handle exceptions, and prevent the customer from getting stuck in disconnected systems.

Configurable workflows help ensure that humans focus only on true exceptions while straight‑through processing becomes the default experience, mirroring the seamlessness customers associate with platforms like Amazon.

00:40:00  - A roadmap for community banks

In closing the discussion, Paul asks the panel to leave community banks with practical guidance on how to move forward in a world where small businesses are increasingly digital‑first, even when they live right down the street.

Pedro explains that relationship banking must evolve accordingly. Traditional models based on static products and occasional interactions are no longer enough. Community banks, he says, should lean into continuous, insight‑driven engagement, anticipating customer needs, surfacing relevant guidance, and making it simple to act on that guidance.

Sometimes the interaction may be human; sometimes it may be digital. With the rise of AI, banks now have more tools to analyze patterns, generate insights, and expose opportunities in real time. Rather than replacing bankers, AI can enhance their work, ensuring the bank stays relevant in a small business’s daily life.

Once Jerry rejoins, he echoes that modern relationships are defined less by branch visits and more by how well the bank understands the customer’s world. When banks unify a customer’s retail and business profiles digitally, they can recognize patterns and anticipate needs across their full financial picture. That allows the bank to show up with the right guidance at the right moment, routine interactions handled digitally and nuanced moments handled by people. Community banks, Jerry argues, are uniquely positioned to blend the speed and clarity of digital channels with the human depth that small businesses still value.

As the conversation shifts toward final recommendations, the panel acknowledges that AI will play a growing role in providing timely, actionable financial insights without overshadowing relationship bankers. Paul then asks what community banks should prioritize over the next 12 to 18 months to win small business loyalty.

Pedro stresses that banks must “own the experience layer,” especially as AI assistants begin interacting directly with banking systems. Banks risk becoming invisible if they don’t control how customers experience their financial tools. He encourages community banks to think in terms of bundled, tiered offerings that grow with the business—more like subscription‑based service models than traditional balance‑or transaction‑driven accounts. Small businesses don’t want to assemble their own tech stack; they want a bank that offers clear, bundled solutions that adapt to their needs.

Jerry adds that none of this is possible without modernizing the bank’s architecture. He urges community banks to adopt an API‑first, event‑driven model that frees them from the constraints of the core, allows modular innovation, and ensures new capabilities: payments, real‑time rails, lending, treasury, plug cleanly into a unified experience.

Without this architectural foundation, banks simply cannot deliver the speed, integration, and real‑time visibility that small businesses expect, no matter how strong the bank’s relationships may be. Competing on pace, not just trust, must be a priority.

As the speakers wrap up, Paul thanks the panel and reiterates the key takeaway: neobanks are winning small business loyalty by delivering fast, seamless, digital‑first experiences that mirror what users expect from modern consumer apps.

But community banks have powerful strengths, brand trust, local relationships, and deep contextual understanding, that can be paired with modern technology and smarter product packaging to create a compelling competitive advantage. Catherine then closes the session, thanking the speakers and audience.