On October 9, 2024, Datos Insights held its annual Commercial and Small Business Banking Forum in New York City, bringing together leaders and innovators from across the banking and payments industry to explore what’s truly changing financial services. Speakers from a range of leading banks, FIs, and fintechs dove into a dynamic range of topics, from payment modernization to improving bespoke small-business offerings and leveraging new technologies, including artificial intelligence, for customer and institutional success.
The discussion, networking, and insights that emerged will help the participating FIs to adjust their course into 2025 to capitalize on their opportunities while shoring up their vulnerabilities in this uncertain economic time.
Payments Modernization: Meeting Evolving Business Demands
A key focus of the event was the ongoing transformation of payment systems. Banks are facing increasing pressure to modernize their payment offerings as businesses seek faster, more automated, and better-integrated solutions. Datos Insights research reveals that over half of banks struggle to offer a consolidated view of payments, while businesses cite payment speed, enterprise resource planning (ERP) system integration, and real-time visibility as their biggest pain points.1
During the Payments Modernization: Achieving Operational Efficiency with Speed, Automation, and Integration panel, Datos Strategic Advisor Gilles Ubaghs shared that 92% of banks plan to increase modernization investments in their next budget cycle. Panelists emphasized the importance of prioritizing initiatives, upgrading back-end technology, and having the right talent on hand to implement new capabilities. The discussion underscored the urgency for banks to address these challenges or risk losing clients to more agile competitors.
Enhancing the Small Business Banking Experience
The event’s Small Business breakout track focused on improving offerings for small and midsize businesses (SMBs). Panelists highlighted the growing expectations of SMBs and their customers, who increasingly demand digital-first solutions and more personalized services. The increasing presence of younger business owners and decision-makers, who are digital-native and have a higher expectation of digital banking capabilities than previous generations, adds another layer of complexity.2 The risk for banks not adjusting course for this shifting SMB landscape is the potential loss of valuable banking relationships to competing FIs and fintechs. Willingness to change FIs is rising at a generational level, meaning that banks would be wise to keep this on their radar.
Banks are responding to these potential challenges, namely by investing in user-friendly platforms that provide SMBs with better cash flow management tools, easier access to credit, and more streamlined onboarding processes, along with a broader and more dynamic payments toolkit. Panelists emphasized the importance of mobile banking solutions for SMBs, reflecting the changing ways business owners manage their finances, as well as enhanced communication to discuss new and potential product offerings.
Specializing for Mid-Market and Large Corporate Customers
Attendees also enjoyed a Mid-Market and Large Corporate breakout session, where panelists took the audience through challenges and real-world opportunities for effective data management, APIs, and digital payments solutions that are aligned with corporate expectations.
On the data management front, panelists discussed an occasionally overlooked aspect of digital payments, which is the large amount of data available that banks and corporations struggle to use effectively. Banks still struggle with providing data-driven payment visibility, control, and integration with ERPs, making this an area of lag for corporates. To address this, banks must make a broader shift in how they collect and use data. Opportunities include monetizable insights and alerts tied to real-time payments data, programmable payments, and deeper ERP integrations via API for improved liquidity management and decisioning for corporate users.3
On the payment front, panelists agreed that the industry is at a critical juncture, spurred by the upcoming ISO 20022 deadline in March 2025, diversifying payment options, and a complex business environment more generally. To meet this challenge, banks must provide corporate customers with solutions specialized to their needs. This is easier said than done, but for banks looking seriously at this area, it is important to know your customer and their needs deeply. Additionally, banks must balance maintenance with new investments and initiatives and look toward automation, client advisory and collaboration, payment security, and contextual instant payments purpose-built for customers and their workflows.
Artificial Intelligence: Transforming Banking Operations
Artificial intelligence (AI) took center stage at the forum, with plenty of discussion on its transformative potential in banking. Panelists painted a picture of rapid AI evolution, emphasizing the shift from mere data collection to actionable insights that drive business value.
The buzz around generative AI and its cousin, agentic AI, was palpable. These technologies could revolutionize job roles and streamline processes across the banking sector. However, the excitement came tempered with calls for caution. “Start small and solve real problems” became a recurring mantra, with industry experts advocating for focused AI applications that deliver tangible benefits.4
Ethical considerations weren’t forgotten amidst the AI fervor. Panelists stressed the delicate balance between innovation and responsibility, highlighting the need for robust frameworks to guide AI deployment. AI’s potential in banking is exceptionally interesting, but its implementation must be strategic, customer-centric, and, above all, ethical.
Looking Ahead
The 2024 Datos Insights Commercial and Small Business Banking Forum underscored the rapid pace of change in the banking industry. From modernizing payment systems to enhancing SMB offerings and leveraging new technologies like AI, banks face numerous challenges and opportunities. As the industry continues to evolve, CSBB plays a crucial role in fostering dialogue, sharing insights, and shaping the future of commercial and small-business banking. However, the Commercial Banking and Payments team is available year-round to discuss what’s top of mind for your organization.
For more information on payments strategies and technologies, reach out to Erika Baumann at [email protected].
- See Datos Insights’ report, Real-Time Payments: Navigating Complexity, Unlocking Value, May 2024. ↩︎
- See Datos Insights’ report, Millennial SMBs, Digital Banking, and Payments: Optimizing for Generational Shifts, July 2024. ↩︎
- See Datos Insights’ report, ERP Banking FAQ, April 2024. ↩︎
- See Datos Insights’ report, Generative AI in Banking: Use Cases and Opportunities, December, 2023. ↩︎
