Community banks and credit unions have their work cut out for them when it comes to serving small and middle-market business clients. As these institutions double down on strengthening their commercial banking divisions, a few key trends and opportunities stand out.
Commercial banking tends to divide clients into three categories: Business Banking (under $20M in revenue), Middle Market Banking ($20M-$500M), and Specialty Finance. Each group has its own playbook, and when banks understand these differences, they’re better positioned to deliver real value and build long-term relationships.
One of the biggest challenges for banks is getting a clear picture of privately held businesses. Making solid lending decisions without knowing the essentials—like gross revenue and leverage ratios- is hard. Without that information, gauging creditworthiness or setting smart collateral terms can feel like shooting in the dark.
Talent gaps are another hurdle, especially when shifting from commercial real estate (CRE) to commercial and industrial (C&I) lending. Moving into C&I lending isn’t just a shift in strategy—it’s a whole different ballgame. Working capital assets don’t behave like real estate collateral, and managing that shift takes a different skill set and risk approach.
Long-term growth in commercial banking often boils down to two things: building deeper relationships and finding cost-effective deposits. Cross-selling services like treasury management, foreign exchange, business card management, and merchant services aren’t just about adding revenue—they are about being the go-to financial partner when businesses need more than just a loan.
At the same time, nothing beats the efficiency of good old-fashioned commercial deposits for funding growth. The best way to unlock both opportunities often starts with the first credit relationship. Once that loan is approved and the ink’s dry, it’s prime time to introduce treasury sales partners who can help the business with its cash management needs, opening the door to an even stronger relationship.
Modern AI-powered analytics tools are becoming a real game-changer for banks looking to tackle these challenges head-on. These platforms give bankers the inside scoop, helping them know the right time to reach out, what products a client might need next, and even how to gauge market risks more clearly.
Banks can better understand client needs by turning all that data into usable insights while keeping their lending processes running smoothly and efficiently.
The banks that win in the years ahead will blend smart tech with relationship-driven service. It’s not just about being efficient—it’s about staying personal while working smarter.
Success will depend on how well banks put AI to work for better risk assessment, faster loan decisions, and stronger client relationships. Tying lending and treasury services together seamlessly while using data to personalize service will be key to staying competitive.
The sweet spot lies in using technology to make the hard stuff easier while keeping genuine relationships front and center.
The partnership between Finov8r and Crux shows how banks can get the best of both worlds. By combining Crux’s data-driven insights with Finov8r’s strategic expertise, banks can make smarter lending decisions while crafting financial solutions tailored to each client’s needs.
At the end of the day, banks that keep one eye on innovation and the other on the people they serve will be the ones leading the pack.
Finov8r is a leading embedded advisory consultancy that supports banks, fintechs, and corporations. Bridging finance and technology, Finov8r provides tailored solutions that foster profitable growth, simplify technology complexities, and deliver 5x ROI through fintech innovations. With hands-on advisory, Finov8r works within teams to achieve long-term results, unlock new revenue streams, and modernize operations. For more information, visit finov8r.com and follow on LinkedIn.
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