Payment modernization, treasury platform integration, and artificial intelligence (AI) deployment have become the primary competitive differentiators determining client retention and acquisition. Banks treating these shifts as incremental technology upgrades risk losing ground to financial institutions and fintech competitors that recognize that payment infrastructure, enterprise resource planning (ERP) system integration, and AI automation are interconnected elements of a holistic transformation.
Our eighth annual Commercial and Small Business Banking Forum in New York City brought together banking executives and industry thought leaders to explore how banks can transform infrastructure and capability investments into sustainable competitive advantages that drive tangible ROI.
I opened the forum with research showing nearly half of businesses have already changed FIs to access faster payment capabilities. Payment capabilities and the ability to offer payment rail choices now determine competitive positioning, rather than simply facilitating legacy transactions.
The data also revealed that more than half of businesses work or plan to work with fintech firms for expanded payment options. These relationships create real switching barriers as businesses integrate fintech capabilities into core workflows. Seventy-eight percent of midsize and large corporations utilize fintech firms for what they would have utilized at their FIs. These are really valued, sticky services, and businesses are adopting technology, payment rails, and capabilities faster than ever.
Payment Infrastructure Emerges as the New Battleground
Payments were a key focus throughout the event. One panel explored the strategic decision banks face on what comes after the Fedwire migration to ISO 20022. The infrastructure investment is substantial, but delegates agreed that further investment is necessary. FIs that delay strategic consideration of the further application of ISO standards risk falling behind competitors that utilize the standard to offer the faster exception handling and richer data capabilities that corporate clients expect.
Panel speakers emphasized how banks capturing market share use ISO 20022’s rich data fields to automate reconciliation, enhance reporting, and integrate seamlessly with client ERP systems. This approach transforms payments from isolated transactions into strategic data flows that power treasury operations.
Forum discussions revealed how real-time payments heighten this dynamic—nearly nine in 10 midsize and large businesses plan to utilize them before year-end 2026. The advantage is shifting to banks embedding instant payment capabilities into broader treasury workflows. Beyond competitive necessity, real-time settlement improves cash flow visibility and enables just-in-time payment strategies, reducing reliance on costly short-term financing.
Another key discussion topic was how integrated payment platforms with enhanced monitoring, intelligent routing, and automated controls are becoming critical. Yet more than half of businesses cite difficulty integrating online banking with ERP or accounting systems, making integration a decisive factor in choosing financial partners.
From Relationship Retention to Capability Competition
Afternoon sessions explored how payment infrastructure transformation directly enables a broader shift in treasury service delivery. Leading banks are building integrated platforms that orchestrate payment capabilities, cash management tools, and data analytics as services within unified client experiences.
Christine Barry, Leader of Strategic Initiatives at Datos Insights, shared research showing that more than one in four corporate treasurers will likely switch to a new primary FI within two years because competitors offer superior technology integration and workflow automation. The data shows that integration with internal ERP systems is the top priority, followed by ease of submitting payment files and payment option diversity. This indicates a real transition from relationship-driven to capability-driven selection—one that focuses on embedded payments, API connectivity, and automated reconciliation over legacy relationships. Relationships remain critical but are no longer enough on their own.
Concern about product rollout speed also emerged. Some leading banks are integrating third-party capabilities into their platforms to serve clients who expect robust, end-to-end payment solutions with real-time settlement and reporting. Virtual account management has become an emerging expectation—adoption has doubled since 2023, with banks leveraging virtual accounts as deposit growth engines for specialty segments including title and escrow and property management.
The competitive battleground is shifting. Historically, FIs could be technological laggards and remain competitive enough to create growth. That dynamic has changed, forcing FIs to build more robust capabilities that make banks indispensable to client workflows.
The Implications of the AI Bubble
The keynote from senior Datos Insights’ Strategic Advisor Gilles Ubaghs discussed the AI bubble and its implications for financial services. History suggests that the bubble may (and probably will) burst—the market will face a correction, but the transformative technology is here to stay. FIs that aren’t investing in AI-infused solutions will be at a disadvantage. Ubaghs also led a lively panel examining the lived realities of AI for FIs, including questions on ROI, change management strategies, and data approaches.
FIs are investing in AI at an unprecedented scale. They’re deploying machine learning models for credit decisioning, using natural language processing for customer service, and implementing generative AI (GenAI) for document analysis. The technology has moved into production environments that process millions of transactions.
Ubaghs questioned whether technology is advancing faster than enterprises can absorb it, noting that the primary cause of pilot failure isn’t technical—it’s staff reluctance to adopt new tools. AI is too often done to the business, not for it.
Despite massive investment, attendees acknowledged that practical adoption advances steadily rather than explosively. Half of corporate clients currently use GenAI tools in banking and payments, and two in five businesses expect their primary FI to help navigate AI adoption. Banks positioning AI capabilities as client enablement tools differentiate themselves by solving client problems rather than simply reducing costs. Yet doing so is easier said than done, and FIs must still answer internal questions about expected ROI, change management strategies, and institutional approaches to data.
Treating Disruption as an Opportunity
Closing remarks emphasized how successful banks treat current disruptions as infrastructure-building opportunities rather than defensive necessities. Payment modernization, treasury product development, and AI integration require significant investment but create the foundation for sustainable competitive advantage, functioning as mutually reinforcing elements of a single strategic transformation.
The institutions capturing market share recognize that corporate clients now evaluate banking relationships on how seamlessly financial services integrate into operational workflows with robust automation and payment capabilities. We’ll examine how FIs are translating these strategic imperatives into operational reality at the ninth annual Commercial and Small Business Banking Forum, returning in fall 2026. For more information and registration details, visit Datos Insights’ Commercial and Small Business Banking Forum.
