SMB banking trends to watch in 2025

Real-time payments become expected

Small businesses have waited years for instant payments to move from pilot programs to daily reality. With the Federal Reserve’s FedNow service and The Clearing House’s RTP network gaining traction, 2025 is the year when customers begin to expect instant settlement. Banks serving SMBs are rolling out real-time payments APIs alongside updated treasury portals that show intraday cash availability. Expect suppliers to request instant disbursements and buyers to push for real-time refunds. Companies should evaluate whether their bank supports real-time rails, review transaction fees, and update treasury policies to accommodate 24-7 settlement windows.

Deposit pricing pressure continues

The rapid jump in interest rates between 2022 and 2023 forced banks to compete for deposits. That competition will continue even if rates ease slightly. Online-first banks will keep offering yields above five percent on operating cash, while regional banks focus on bundled services to retain balances. SMBs should segment cash between operating accounts and reserve accounts, monitoring the blended yield monthly. Negotiating earnings credit rates with relationship banks remains critical if you maintain large deposit balances. Treasury teams should build dashboards that benchmark yields against alternatives such as money market funds and short-term Treasury bills.

Lending standards stay tight

Higher interest rates and economic uncertainty have tightened credit boxes. Banks continue to scrutinize debt service coverage ratios, leverage, and collateral. Expect lenders to require more detailed financial projections and stress testing, especially for industries exposed to discretionary consumer spending. SBA-backed loans will remain popular due to their guarantees, but processing times could stretch as demand climbs. SMBs should assemble updated financial packages now, including interim statements and rolling forecasts, to respond quickly when lending opportunities surface.

Embedded finance moves downstream

Large enterprises already embed financial products into their platforms. In 2025, SMB-focused vertical software companies will follow suit by offering branded bank accounts, cards, and lending. For business owners, this means more choice but also more complexity. Evaluate embedded offerings on FDIC insurance coverage, fee transparency, and ability to export data into your accounting system. Ensure the provider discloses which partner bank holds deposits and how disputes are resolved. Embedded finance can streamline workflows when integrated tightly, yet businesses should avoid locking critical funds into closed ecosystems without clear exit paths.

Regulatory attention on fintech partnerships

Bank regulators have sharpened oversight of bank-fintech partnerships. The Office of the Comptroller of the Currency and FDIC released guidance that demands stricter risk management, data governance, and consumer protection controls. As a result, some partner banks may slow onboarding or adjust terms with fintech collaborators. SMBs using fintech banking platforms should read service agreements carefully, confirm who holds deposits, and monitor for notices of policy changes. Maintaining relationships with at least one traditional bank can provide a safety net if a fintech partner faces regulatory headwinds.

Fraud and cybersecurity investment grows

Payment fraud attempts remain elevated. Business email compromise schemes are more sophisticated, and criminals exploit faster payment rails to move funds instantly. Banks are responding with adaptive authentication, behavioral analytics, and confirmation-of-payee tools. SMBs should upgrade internal controls, enforce multi-factor authentication, and train staff to verify payment instructions through secondary channels. Review treasury portals for positive pay features and outgoing payment limits. Insurance carriers increasingly require demonstrable controls before issuing cyber policies, making investment in security a financial necessity.

Treasury teams seek automation

Resource-strapped finance teams are adopting automation to reconcile accounts, forecast cash, and execute payments. Low-code workflow tools and modern bank APIs let SMBs automate recurring tasks without large IT budgets. Expect new integrations between banks, ERPs, and spend management platforms that reduce manual journal entries. Businesses should inventory treasury processes, rank pain points, and pilot automation where impact is highest. Ensure human oversight remains in place; automation should augment decision-making, not replace controls.

Sustainability influences banking relationships

Environmental, social, and governance considerations continue to shape banking decisions. Some banks offer preferential pricing for businesses pursuing sustainability initiatives, while others provide reporting tools that help track emissions tied to supply chains. SMBs seeking to raise capital or win contracts may find these services differentiate them. Ask banks about sustainability-linked loans, green revolving credit facilities, and advisory support. Document your initiatives so you can leverage favorable terms or meet customer requirements.

Preparing for 2025

To stay ahead, small businesses should audit their banking stack. Confirm support for real-time payments, benchmark deposit yields, and refresh credit packages. Diversify banking relationships to mitigate regulatory or operational risk. Invest in fraud controls and automation, and stay informed about embedded finance developments. The winners will be businesses that treat banking as a strategic partner rather than a back-office necessity.