Seven Best Practices That Drive Commercial Banking Primacy

Every banker understands the value of being a business client’s primary bank: primacy drives more deposits, longer-term relationships, and ultimately more revenue. Increasingly, this goal is under threat from industry-focused software companies and fintech rivals embedding payments and banking services into their platforms.

PayPal is a good example. They proactively tell customers they are not a bank, yet clients can deposit money and earn a competitive interest rate through their Synchrony Bank partnership. Why should other banks care? Because a business can move part of its deposit relationship to Synchrony/PayPal — at the expense of its primary bank. Once that happens, PayPal will have many interactions with the client going forward. What prevents that client from taking out a working capital loan or credit card next? A seemingly innocuous relationship with a fintech can result in gradual-but-complete merchant churn.

How do banks compete? 30+ years of banking and fintech experience has taught us that banks can no longer “just” be banks — they must be partners to business clients. That means more than assigning a banker to the relationship. It means proactively bringing solutions to customers in a simple, low-effort way that meets them where they operate.

Some banks do this well and are thriving in their communities, regions, or nationally. Many, however, still operate in the era of bankbooks and deposit slips. It’s not about the technology — it’s about the solutions. Here are seven best practices from banks that are exceeding their goals by adjusting their mindsets and setting themselves apart in driving primary relationships.

1. Get the Big 3 Right

By understanding how their customers view banking, banks can create solutions that align with customer expectations. For most small businesses, the Big 3 — the three most important banking products — are a checking account, card/loan, and merchant services. Deposits and credit products are well understood in banking. Merchant services isn’t.

Traditionally, merchants thought of merchant services as the ability to accept card payments. Today, merchants think of it in a much more comprehensive way: point-of-sale systems, integrations with inventory management, eCommerce platforms, and more. Banks that factor this shift ensure that merchants see their bank as a vital partner in their success.

What does it mean to get these Big 3 products “right”? It requires learning what’s right for the customer. Banks are notoriously siloed organizations. These silos — each focused on the price, convenience, and comprehensiveness of their own product — typically prevent organizations from seeing the product as the customer does: as a small part of a larger solution. Bundling can drive growth when done correctly, and building industry-specific solutions can accelerate it even more. After all, doctors’ offices are very different from bakeries — banking products should reflect those differences.

2. Provide Enhanced Data Analytics and Insights

Banks have a wealth of data at their disposal, but they rarely have payment acceptance data. By providing merchants with detailed analytics and insights into consumer behavior, sales trends, and market opportunities, banks can empower businesses to make informed decisions. These insights help merchants tailor their offerings, optimize inventory, and identify growth opportunities — reinforcing the bank’s role as a strategic advisor rather than just a service provider.

3. Competitive Pricing, Incentives, and Transparent Fees

Merchants are highly price-sensitive when selecting a payment processing provider. Banks can drive primacy by offering competitive pricing and transparent fee structures. This builds trust and ensures merchants feel they are getting the best value from their banking relationship.

One effective approach is the “carrot” model — incentivizing clients through bundled pricing to maintain total relationships with you. Don’t compete on price alone, but acknowledge and respect your clients’ sensitivity to it.

4. Seamless Integration and Advanced Technology

Seamless integration with existing business systems is essential. Banks can attract and retain merchants by offering technology that integrates with various sales channels — in-store, online, and mobile. Features like contactless payments, digital wallets, and fraud prevention tools enhance the merchant experience and make the bank harder to displace.

5. Familiar Support and Relationship Management

Exceptional customer service sets a bank apart. Dedicated support teams and relationship managers who understand the unique needs of their clients build strong, enduring relationships. Regular check-ins, personalized advice, proactive ideas, and prompt issue resolution significantly enhance merchant satisfaction and loyalty.

According to Deloitte Consulting, nearly half of Gen Z and Millennial business owners want advice to run their business — market research, financial education, personalized guidance, and industry insight — and that demand is growing. Primacy is not just about today. It’s about sustainability into tomorrow.

6. Bank Where They Are

“Digital first” is a battle cry for many companies — not just banks. But businesses need more than a mobile app. Access to experts, branches, and technology are all part of the equation.

Imagine you owned a small business. Your business is cashless — only accepting cards or digital payments. Your need for a branch diminishes, but as a small business owner you still need access to help and advice. Digital and video consultations are emerging, putting names to faces while delivering financial results. Bank of America is reporting 15% year-over-year growth in digital usage.

The healthcare industry is instructive here. Virtual visits and consultations mean patients no longer have to go in for every appointment. A growing number of practices are adopting virtual capabilities to manage cost, reduce risk, and provide better service. Banking, like healthcare, is highly regulated — but compliance is a set of requirements, not a reason to avoid change. Meeting customers where they are is essential to creating primary relationships, and technology is critical to support that.

7. Educational Resources and Community Building

Banks can further drive primacy by providing educational resources and fostering community among their clients. Workshops, webinars, and networking events help merchants stay current on industry trends, best practices, and new technologies. Building a community of engaged merchants enhances loyalty and turns clients into advocates.

By focusing on these areas, banks can position themselves as indispensable partners to their merchant clients — driving primacy and fostering long-term relationships. As the financial services landscape continues to evolve, the banks that prioritize customer-centric solutions and exceptional service will be best positioned to thrive.

pAIwares’ consulting and development capabilities help banks of all sizes drive commercial customer primacy. If you’d like to learn more about how we’ve helped organizations make the shift from product-centric thinking to customer-centric solutions, reach out.