Primax, a Tampa-based provider of payment processing and value-added solutions for US community banks, has published its second annual Banking in Focus research report. Conducted in partnership with Visa, the study surveyed 600 US small- and medium-sized business owners and decision-makers and finds that fragmented banking relationships are the norm rather than the exception among SMBs.
The headline figure is straightforward: 86% of SMBs surveyed work with more than one banking provider, using an average of 2.8 financial institutions for their business banking needs. Despite reporting high satisfaction with community banks on fees and service quality, SMBs are less likely to name a community institution as their primary financial partner. For community banks competing for wallet share, the gap between satisfaction and primacy is the core commercial problem the report addresses.
Where the wallet-share gap opens
The study identifies lifecycle dynamics as the key driver. As businesses scale from micro and small (under $10 million annual revenue) into the lower middle market ($10 million to $50 million), their demand for more complex products accelerates. Payment processing, payroll, treasury management and financial advisory services become priorities, and larger regional or national banks have historically been better resourced to deliver them. Primax’s report argues community banks that evolve their product set alongside growing customers are better placed to retain those relationships rather than lose them to larger competitors at each growth threshold.
One data point underscores a specific cross-sell opportunity: 53% of SMBs use the same institution for both personal and business banking. For community banks that already hold a founder’s personal current account, that is a natural entry point into the business relationship, provided the institution can demonstrate business-grade capabilities.
Credit and payments access also emerges as a growth constraint for a significant share of the survey cohort. One in three SMBs reported that payment and credit challenges affect their ability to manage cash flow and invest; the proportion rises to 39% among lower middle market businesses. Community banks that can position themselves as a reliable source of working capital and payment infrastructure, rather than a depositary relationship only, stand to capture a disproportionate share of the most active borrowers.
Market context and regulatory backdrop
The SMB banking segment is contested ground. Large national banks have invested heavily in digital business-banking platforms, and a cohort of fintech lenders and neobanks, including Relay, Novo and Bluevine, have built deposit and payments products specifically targeting small businesses underserved by traditional institutions. Community banks’ structural advantage remains personal relationships and local credit knowledge, but the report signals that digital banking and fraud protection have moved from differentiators to baseline expectations.
Regulatory context adds a further layer. US banking regulators, including the OCC and the FDIC, have in recent years encouraged community banks to deepen SMB lending as part of broader community reinvestment and small-business access-to-capital agendas. Simultaneously, the Consumer Financial Protection Bureau‘s small-business data collection rule, finalised under Section 1071 of the Dodd-Frank Act, will require lenders to report SMB loan application data from 2026, increasing transparency and competitive pressure in the segment.
Bill Hampton, president of Primax, said the research showed that the path forward for community banks is “not replacing those strengths, but building on them with the capabilities SMBs need to manage and grow their businesses.”
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