Winning Primacy: Why Fixing the Switch Is the Key to Full SMB Relationships

In business banking, the ultimate goal isn’t just opening an account – it’s achieving primacy, where your institution handles the core financial operations of an SMB: accounts payable (AP), accounts receivable (AR), payroll, and ongoing cash management. Primacy secures stickier client relationships, increases revenue, and deepens institutional value.

While new accounts are being opened, the path to becoming the primary institution is often left unfinished – usually because businesses hesitate to shift their existing systems. These new accounts often become stagnant, generating minimal activity and negligible returns. The culprit? Operational friction: SMBs hesitate to switch existing payment flows, limiting both onboarding and reactivation potential.

This article explores the “primacy problem,” supported by recent market data, and outlines how fintech-enabled switching solutions – demonstrated by platforms like Onsetto – can empower institutions to convert both new and dormant accounts into fully engaged, primary relationships.

The Race for Primacy Is Real

Primacy isn’t just industry jargon – it’s the difference between being a transactional vendor and becoming a strategic partner for SMBs. The primary financial institution manages a business’s essential flows: AP, AR, payroll, and treasury. These functions drive the vast majority of deposits, fee income, and cross-sell opportunities.

Industry research shows SMBs typically engage with 2-3 financial institutions, but only one achieves primacy. For community institutions, being that primary partner is the key to driving greater engagement, retention, and long-term revenue.

The Problem: Opening ≠ Owning

Opening a business account is only the first step. The real challenge – and opportunity – lies in becoming the SMB’s primary financial institution. Too often, even after a successful account opening, key financial flows like AP, AR, and payroll remain with a competitor.

This disconnect often shows up in three ways:

Dormant Accounts

Many accounts opened during PPP or marketing campaigns never gain operational traction. SMBs deposit funds but never transition core functions like payroll, vendor payments, or receivables.

Limited Staff Intervention

Without frictionless switching support, institutions often lack the capacity to help SMBs shift their embedded systems – leaving long-term value unrealized.

Mounting Opportunity Cost

Each stagnant account represents missed potential for engagement, cross-selling, and fee-based services. Primacy requires proactive pursuit – not passive maintenance.

Together, these challenges point to one underlying issue: becoming the primary financial institution is hard. Without the right tools and support, even strong account openings can stall – leaving SMBs partially engaged and long-term value out of reach.