Small businesses are at the center of a major shift in the financial industry. As digital banking continues evolving, financial institutions increasingly invest in small business services, recognizing their growing economic influence. On today’s episode of The Small Business Show, we sit down with Ben Cash, small business expert and senior product manager at Q2 Holdings, to discuss the key findings from Q2 Holdings’ 2025 Retail Banking Trends and Priorities Report—and what they mean for entrepreneurs.
As the financial landscape rapidly adapts to the rise of small and micro businesses, it is largely in response to the gig economy. According to Cash, the latest Q2 Holdings report highlights a growing focus on digital banking solutions tailored to small business needs.
Historically underserved by banks that prioritized high-end commercial accounts, small business owners are now seeing more financial institutions develop services that offer consumer-like digital experiences.
Further, Cash explains that financial institutions recognize small businesses’ critical role in deposit growth. Banks rely on these deposits to fund investments and lending opportunities, making small business accounts an increasingly attractive expansion area. However, despite this renewed focus, lending remains a challenge. While lending policies have no widespread softening, institutions are restructuring how they assess loan opportunities, leveraging AI, data analytics, and machine learning to better forecast long-term value.
The discussion also touched on the growing competition between traditional banks and fintech companies. Many entrepreneurs, frustrated by rigid lending requirements, turn to alternative lenders that promise quick financing—albeit at higher interest rates. Cash notes that financial institutions are beginning to see fintechs not as competitors but as potential partners in providing faster, more flexible lending solutions.
A key takeaway from the report is that 70% of financial institution executives believe that more than 50% of payment transactions will occur through non-bank channels, such as Apple Pay and Google Pay, by 2030. As digital payment systems continue to grow, banks are striving to incorporate real-time transaction capabilities to meet the changing needs of businesses.
Ultimately, Cash emphasizes that banks must adapt quickly, partnering with technology providers to improve digital banking experiences. By focusing on ease of use, fraud protection, and mobile accessibility, financial institutions hope to better serve the modern small business owner—many of whom operate without a dedicated CFO or financial team.
"The old question used to be, how many of you all know someone that owns a small business? Now, in 2025, the question is, how many of you all own a small business or have some sort of side hustle? I think financial institutions are also picking up on that." – Ben Cash.
