Winning small businesses primacy starts with onboarding

Small business owners increasingly want to complete onboarding journeys online, yet most banks still push them into the branch at the last mile with identity checks, document upload, and signing. That friction is costly: 68% of SMB depositors said they prefer to open accounts entirely online, but up to 20% abandon the process when forced to finish in-branch (BAI).

The institutions that remove these barriers—and connect onboarding to smarter origination and day-one value—are the ones winning share, deepening primacy, and lowering cost-to-serve. This piece distills what the latest SMB-specific research says about the new reality, what leaders do differently, and how to move in 90 days without waiting for a wholesale core replacement.

SMB demand hasn’t evaporated; it’s shifted. In the Fed’s 2025 Small Business Credit Survey, applicants most often sought financing at large banks (39%), then small banks (29%), and online lenders (24%), with reasons diverging by channel (relationships at banks; speed and odds at online lenders). Satisfaction with lenders slipped year‑over‑year, underscoring rising expectations.

McKinsey’s 2025 SMB banking study is blunt: digital experience is now the #1 reason SMBs select a primary bank, SMB clients are ~80% monthly‑active on digital in Europe (far higher than retail), and leaders get ~75% of small‑business product sales via digital. The takeaway is clear: without end-to-end onboarding and origination journeys, banks risk falling behind where growth is really happening.

SMBs are adopting digital channels faster than ever, yet gaps remain in how their journeys are delivered. The friction is most visible in two persistent choke points:

Robert Soetens, VP of Product for Digital Sales and Process Orchestration, cuts to the heart of the issue on the Banking Reinvented podcast:

1. Loan applications rarely run fully online 
   FDIC’s 2024 Small Business Lending Survey shows that while many banks let businesses start online, only 6% let SMBs complete all steps (from consult to e‑sign) digitally. Just 25% accept a formal application via portal, and only 13% support e‑signing. Even banks that value remote communication still pull customers into in‑person steps at the end.
    

2. Deposit account opening (AO) stalls on IDV/funding 
   In BAI’s Small Business Banking Trends: 2024 Outlook, 68% of SMB depositors said they’d prefer to open entirely online and 54% said the same for loans. Yet 16–20% of SMBs who started AO online didn’t finish the process; half of those were forced to do  identity verification or funding in‑branch.

Cycle time still matters. The FDIC finds 81% of large banks and 76% of small banks can approve a small & simple loan within a week, but large banks are far more likely to do it in one business day or less (51% vs. 29%). If your digital flow still hands customers off to manual review queues, that “week” can feel like forever.

Benchmarks of top U.S. banks’ SMB experiences point to a consistent playbook:

• Proactive, real‑time alerts. 82% of scored banks offer real‑time alerts for high‑risk or time‑sensitive events; 55% send real‑time NSF alerts; 36% offer a daily summary — that is small, high‑trust nudges that reduce fees, disputes, and support calls. 
   

• Delegated access & controls. Leaders make it easy for owners to invite staff/accountants with scoped entitlements and back it with activity reporting and transaction limits.
   

• Stronger sign‑in security that reduces friction. Optional passkey/FIDO support is arriving (e.g., BMO, Wells Fargo), cutting password fatigue without compromising risk.
   

• Value‑add integrations. QuickBooks/ADP/Stripe integrations move the relationship beyond balances and payments toward cash‑flow clarity and receivables.

Bottom line: leaders aren’t just “digitizing the form.” They are de-risking and de-toiling the first 30 days so businesses feel the value immediately.

Winning SMB primacy doesn’t require a core replacement. Rather,  it requires a purpose-built SMB digital banking platform that becomes the backbone for onboarding, origination, and day-one engagement.

Think of this not as a simple upgrade, but as the experience layer and orchestration engine sitting above your core. Its job: connect identity verification, document capture, risk checks, workflow automation, and value-add integrations into a single, seamless journey for your SMB customers.

Celent’s 2025 research is clear: the choice of digital banking platform (DBP) is “far more impactful” to business bank success today than it was even two years ago. Your short-list should prioritize vendors with strength in:

• Customer engagement: personalized dashboards, contextual nudges, and proactive alerts.

• Open banking capabilities: easy data sharing with accounting/payroll ecosystems.

• Personalization & workflow control: configurable user journeys without vendor dependency.

Critical capabilities to shortlist

• Embedded KYB/KYC + e-IDV: Enable fully digital account opening and faster credit pre-fill.

• Document capture + OCR + e-sign: Eliminate branch handoffs and let “submit” mean “done.”

• Delegated user roles & entitlements: Give owners tools to onboard staff and accountants safely.

• Accounting & payroll connectors: Surface cash-flow clarity through QuickBooks/ADP/Xero integrations.

• Risk/fraud orchestration: Device intelligence, sanctions screening, behavioral monitoring, all in-flow.

• Low-code workflows: Rapidly tweak and A/B test experiences without months of vendor backlog.

Small business banking isn’t “retail‑plus.” It’s its own discipline: digital‑led with a human in the loop. The research is unusually aligned: SMBs will choose and stay with the bank that lets them complete onboarding online, gives them delegated control out of the box, and shows value on day one through alerts and ecosystem integrations. The banks that modernize now — on a platform designed for business banking — will convert more prospects, fund faster, and grow primacy with less human toil.

When evaluating platforms, like Backbase, it’s key to anchor your case on outcomes and KPIs and time‑box delivery to 90 days. The gap you’ll close is real, visible, and defensible.

How Backbase makes digital journeys work end-to-end

That’s where Backbase comes in. As an AI-powered banking platform, Backbase helps banks deliver the kind of journeys SMBs increasingly demand: fully digital onboarding, faster credit origination, and real-time personalization from day one. By combining orchestration, embedded AI, and open ecosystem integrations, the platform gives banks the ability to modernize without replacing their core.

For business banking leaders, that means less friction for customers, lower cost-to-serve for the institution, and a digital experience that feels as adaptive as the businesses it supports. In short: Backbase provides the digital backbone that lets banks turn onboarding into lasting primacy.

Book a strategy call to learn more about how Backbase helps 150+ financial institutions modernize banking.