Small business banking has entered a period of reassessment as business owners look beyond rates and fees toward financial partners that can combine modern treasury technology with informed, local decision making.
For years, conventional wisdom held that sophisticated commercial banking belonged almost exclusively to large national institutions. But smaller financial institutions have been investing in digital capabilities while attempting to preserve the relationship model that many business owners say has become harder to find.
Thomas Sebok, chief commercial banking officer at Citadel Credit Union, told PYMNTS in a recent interview that he believes the perception of credit unions has not kept pace with how many of them now operate.
“Perhaps there’s a stereotype when the words ‘credit union’ comes out, where people think about little league accounts, Boy Scout accounts, PTA type accounts,” Sebok said of credit union (CU) clientele. “But what you’ll find here are embedded service providers, professional services and businesses like restaurateurs or local franchisees that make up the fabric of the communities where we live.”
Sebok joined Citadel after more than two decades in commercial banking at larger institutions. His perspective reflects experience on both sides of the industry rather than an argument that one model universally outperforms another.
He acknowledged that large banks understand commercial clients well.
“Big banks do get small businesses in a resounding way,” Sebok said. “The challenge for big banks is: How do you meet the needs of a small business owner when you have so many different customers.”
He added that many entrepreneurs still value regular interaction with someone who understands their business, but the scale of national institutions often pushes those relationships toward digital or virtual channels, reducing personal contact.
Small Businesses Need More Than Credit
Those expectations arrive at a complicated moment for smaller companies.
Interest rates remain elevated compared with recent years, fraud continues to expand across payment channels and businesses are under pressure to modernize financial operations while preserving liquidity. At the same time, entrepreneurs increasingly expect banking services to function with the same speed and accessibility they experience in other parts of their businesses.
Sebok described the current period as a turning point.
“We’re at a pivotal time in the history of commercial and small business relationships,” he said. “It is a digital evolution.”
He argued that entrepreneurs evaluating financial institutions should look beyond pricing alone.
“The days of going into a local branch, leaving with a pack of starter checks and a brochure for checking are well behind us,” Sebok noted. Businesses now require payroll services, ACH capabilities, wire origination, remote deposit capture and other digital tools simply to operate efficiently.
Fraud has become equally important.
“One of the most critical things that are facing our industry as a whole is the paralyzing volume of fraud, whether it be in the electronic or check-related format,” Sebok said.
Those realities have broadened expectations for business banking. Commercial customers increasingly expect treasury management, payments, fraud protection and financing to work together rather than exist as separate products.
That shift also changes how financial institutions compete.
Citadel reported commercial loans of $449 million, up 17% year over year, according to company figures. Rather than treating lending as an isolated product, Sebok said the institution has spent the past two years trying to “bank the whole” relationship.
Sebok said many businesses benefit when financial institutions understand how companies operate instead of evaluating applications against rigid lending templates.
Digital capabilities remain part of that equation rather than an alternative to personal relationships.
“We’re not your grandparents’ credit union,” Sebok said, describing a strategy that combines community relationships with technology including AI-assisted credit processes, predictive analytics and digital access available around the clock.
