ProSight Banking Outlook
2025 Small Business Trends
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In 2025, businesses of all sizes are balancing growth ambitions with rising operational pressures and the persistent challenge of fraud.
Meanwhile, shifts in preferences in banking and the integration of proactive relationship management are reshaping how small businesses interact with financial institutions. Supported by detailed data and actionable insights from the annual ProSight Small Business Outlook survey, this gbook examines the emerging trends and pressing challenges impacting small businesses and the financial institutions that serve them.
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Growth as the Top Priority
61%
46%
34%
49%
32%
44%
35%
51%
33%
<$1M
$1M-<$5M
$5M-<$10M
$10M-$20M
annual revenue size
top priorities
Growth is critical, with just over 50% of business ranking it as their top challenge.
Growth Cash flow Cybersecurity Operational efficiency Technology investments
key
The Rising Threat of Fraud
With nearly 60% of businesses citing fraud as a significant concern, financial security continues to be a focal point for businesses and their banking partners. Institutions offering visible fraud mitigation solutions are better positioned to retain their clients. Businesses are adopting multiple strategies to combat fraud.
Require dual authorizations for significant financial transactions.
Review account and financial statements to catch discrepancies.
Invest in fraud detection tools to flag unusual transaction activity.
Leverage cybersecurity tools like firewalls and antivirus software.
Fraud prevention is not purely a financial defense mechanism; it strengthens relationships built on transparency and reliability. Businesses that feel secure are more likely to deepen loyalty to their financial partners.
Changing Banking Preferences
Local banks and credit unions have seen a decline of 3% year-over-year as the primary financial provider for small businesses. Meanwhile, direct/alternative banks are experiencing 5% growth annually. While large banks continue to serve the majority of small businesses, their market share has declined by roughly 2% year-over-year.
A growing shift to alternative providers
Businesses under $1M in revenue are more likely to choose direct/alternative banks (24%), whereas only 6% of businesses generating $10M-$20M consider these options.
View The Data
24%
5%
4%
1%
20%
11%
68%
17%
9%
69%
21%
6%
79%
18%
Direct/Alternative Local bank or CU Regional bank Large bank
Main business financial provider by annual sales size
Lowest fees
Best products
Positive reputation
Services that help run their business
Best rates
Why do businesses switch?
Dual-provider strategy
There is increased demand for specialized services:
52% of businesses use more than one provider for deposit accounts.
This dual-banking approach highlights opportunities for traditional financial providers to innovate and expand service offerings, particularly in areas like competitive merchant services and advanced digital platforms.
40% rely on multiple providers for loans.
A major change from 2024 is that “best rates” is no longer one of the top five reasons to shift service providers, underscoring the loyalty that is tied to trust, advisory services and adequate support structures.
Digital and branch preferences
of small business owners prefer utilizing branches for account creation, while mobile trails behind at 29%.
of interactions now involve digital and self-serve channels.
Mobile and online preferences continue to outpace other channels, reinforcing the importance of user-friendly and secure digital banking tools.
Small business owners aspire to leverage digital channels for account openings but often face roadblocks that prevent this, like identity verification.
The Role of Relationship Managers
Businesses with revenue between $5M-$20M maintain these partnerships for an average of 2.6 years, reflecting the stability and trust inherent in such relationships.
Do you have a relationship manager?
The role of relationship managers cannot be overstated. Larger businesses value these professionals as critical partners in their financial strategies:
Yes
No
By annual revenue of business
Average tenure of relationship manager
IN YEARS
Relationship managers are critical for goals like:
Helping businesses manage operations effectively Educating clients on digital solutions to streamline processes
Advantages of relationship managers
of businesses earning $1M-$5M say their provider calls them at least quarterly, creating ongoing opportunities for personalized advice.
of businesses earning $10M-$20M agree their financial provider is well-integrated into their business operations.
Offering similar advisory services to smaller businesses could unlock growth opportunities and increase client loyalty for financial providers.
Looking Ahead
The financial industry moving into 2025 will be defined by heightened competition, evolving customer expectations and ongoing risks. Key considerations include:
Enhancing fraud prevention tools and educating businesses on evolving risks
Expanding digital channels to deliver seamless, intuitive banking experiences
Strengthening relationship management programs, especially for smaller business segments
By addressing these priorities, financial providers can build deeper trust and better support the diverse needs of their clients, ensuring mutual success in the years ahead. Learn more about how ProSight research can help financial institutions make smarter business decisions by viewing our latest webinar or get in contact with us today.
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