SMB digital account opening is the next competitive frontier

A version of this article first appeared in the August Executive Report: Delivering what small-business banking demands. Inside, you can find more insight from strategists and thought leaders on relationship management trends, smarter SMB digital offerings, and ideas for improving loan servicing ease.

Small and medium-sized businesses (SMBs) make up 33.2 million U.S. firms, the lion’s share of all businesses. Yet community banks and credit unions risk losing ground to competitors, including fintechs, who most would agree have advanced the new digital standard.

In other words, legacy onboarding isn’t just frustrating, it’s potentially a strategic liability. In the race for SMB deposits, speed and simplicity win.

Recent research by Cornerstone Advisors, tracked by MANTL, shows that about 75% of SMBs want to open accounts digitally. Still, barely half of midsize institutions feel confident in their current process. About 53% say business account opening (BAO) limits growth and 40% rate their process “somewhat or very poor.”

Meanwhile, the top 25 banks now hold roughly 84% of primary SMB relationships—a stark indicator of how convenience and speed trump proximity when technology lags.

A $400 billion opportunity hiding in plain sight?

Surveys continue to show that owners prefer to bank with traditional institutions—they value local knowledge, bespoke advice and stability.

The message is clear: modernize the digital experience, and community/regional institutions can win this segment, now a $400 billion market opportunity for the banking industry.

Yet it’s not just about being online, it’s about making onboarding seamless and built to scale. “Going digital” can’t mean dropping a long paper process into a web form. Sustainable growth requires a design that improves customer experience and internal efficiency.

4 capabilities that actually scale onboarding

Automated data and document workflows

Replace email chains and paper packets with configurable KYC/KYB “decision waterfalls,” digital signatures, timestamped audit logs and structured exception handling. Automation shortens cycle time and creates an auditable trail for compliance teams.

Adaptive due diligence

SMB onboarding is not one-size-fits-all. Requirements should expand or contract in real time based on entity type, ownership structure, geography, or risk flags. Dynamic checklists prevent over-collecting (and frustrating low-risk sole proprietors) while ensuring thoroughness for complex entities.

API-driven verification

Rather than mailing documents back and forth, tap public records, government registries, and best-in-class data providers to verify ownership, good standing, identity, and watchlists instantly. Done right, this lowers fraud and manual review without sacrificing accuracy.

Treat the branch as a strategic asset

Empower staff to confidently onboard business accounts in-branch, while using digital tools to streamline workflows and turn both channels—online and in-branch—into profit centers.

At this FI, speed goals are put into practice

Institutions that embrace scalable SMB account opening are seeing transformative results across channels.

For instance, at Guardian Credit Union, digitizing the account opening experience cut the average time to open an account from three days to approximately four minutes.

As Rachel Stewart, chief experience officer, at the credit union shared: “We recognized the power of automation and how digitizing critical steps in the member account opening process would have an institution-wide ripple effect… We increased new accounts opened online by more than three times per month and saved 300 hours per month on in-branch account opening.”

And at Veritex Community Bank, the results were equally striking. In just 90 days post-implementation, Veritex raised over $135 million in deposits across its 29 branches, increased total account opening volume by 172% year-over-year, and achieved these gains without adding any additional headcount.

Rudy Beeching, EVP and managing director of retail and business banking, put it simply: “Our legacy account opening process had so much friction that it prevented our bankers from connecting with clients… Now, we’re opening accounts in seven minutes instead of 87 minutes. The transformation is night and day.”

These institutions show what’s possible when BAO is frictionless, omnichannel and scalable. Across community and regional banks, we’re seeing leaders use digital onboarding to:

• Test new markets without committing to costly branch buildouts.
• Offset consumer deposit attrition by deepening business relationships.
• Unlock cross-sell in lending and treasury by eliminating onboarding delays.
• Reorient branches from paperwork hubs to true sales and advisory centers.

As Beeching noted, the downstream effect is cultural as much as operational: “We achieved 100% employee adoption within 30 days.”

The takeaway? Scalable onboarding not only accelerates growth—it boosts morale, efficiency and long-term relationship value.

Why close this tech gap now

Deposit competition is intensifying, consumer attrition pressures are real, and many institutions are rethinking their branch strategies. Digitizing SMB onboarding is a lever that boosts deposits, improves efficiency and deepens relationships—all at once.

Community and regional institutions already hold the trust advantage. Closing the technology gap is the step that lets them capitalize on it.

The market is ready. The technology is ready. The real question: Is your onboarding process ready?

David Carlson is Vice President of Sales at MANTL.