At last year’s CONNECT 25 customer conference, Q2 Senior Product Manager Michelle Annett kept hearing the same question from financial institution leaders in attendance. It wasn’t where is the bathroom, where to get a cup of coffee, or even what Q2 products are available. The primary question was about something more fundamental: What order should products be implemented in?
That question became the seed of “Building Your Small Business Playbook,” a session at CONNECT 26 focused on providing a strategic approach to one of the most underserved and lucrative segments in financial services. Annett, joined by Ryan Johnson, customer experience expert, and Dean Jenkins, principal digital solutions strategist at Q2, laid out a sequenced, three-pillar framework designed to help financial institutions (FIs) acquire, deepen, and ultimately differentiate their small and medium-sized business (SMB) relationships while keeping deposits at the center of the strategy.
The timing could not be more appropriate.
According to the SBA’s Office of Advocacy 2025 Small Business Profiles, U.S. small businesses opened 1.1 million new establishments in the most recent year of data, meaning the pipeline of potential new SMB relationships is continually refilling. Yet according to the 2025 Datos Matrix: Leading U.S. Providers of Digital Small Business Banking from Datos Insights, 37% of small businesses say they are likely to switch financial institutions within the next two years to find specialized services that help them run their businesses and manage cash flow more effectively. The opportunity is real, and so is the risk of inaction.
So Annett set out to provide a playbook of Q2 products that help FIs grow their SMB portfolios with a deposit focus and, importantly, provide a sequence for building that journey.
Why sequence matters
Most conversations about SMB banking focus on which products to offer. Annett argued that when and in what order you offer them matters just as much—if not more.
She described the frustration she heard from a customer the previous year: “You tell me that I can win small business with all these products, but you don’t tell me what order to implement them in. You don’t tell me how to not burden my Operations team and burn them out with massive new products.”
That concern—operational strain on the FI’s internal teams—runs as a thread throughout the playbook framework. The three-pillar approach is organized around a logical progression: acquire and activate in the first six months, deepen relationships and expand balances in the next six to 12 months, and then scale and differentiate from there onward. The goal at each stage is to introduce the right capabilities at the right moment, accelerating value for the SMB customer without overwhelming either the customer or the institution’s implementation team.
“Every once in a while you can jump in the middle of a flow,” Annett noted, “but it never works as well as a well-positioned plan.”
Pillar one: Acquire and activate
The first six months of an SMB relationship are about one thing: becoming the primary operating account. That means making the onboarding experience fast and frictionless, getting the customer onto digital banking quickly, and having invisible fraud protection running in the background from Day 1.
This is also the phase where FIs need to resist the urge to overwhelm. SMB owners are not bankers. They are running businesses, managing employees, and trying to keep cash flow positive—often simultaneously. The banking terminology that feels like second nature to FI professionals can be alienating to business owners who have never heard of addenda or SEC codes.
Jenkins described the early months as a “burn-in period,” during which the goal is familiarity and education, not product saturation.
“Get them accustomed to the financial institution and start educating them on some of the things that you can do,” he said. “Because if you just put all that in front of them on the first day, they’ll get lost. And then they’ll get frustrated.”
The recommended Q2 tools for this phase include the SMB Digital Banking Platform, Interactive Test Drive to enable businesses to get a personalized view of what their banking experience will be with your FI, Treasury Fulfillment for quick and simple treasury onboarding, and Sentinel and Patrol for fraud protection. These capabilities provide a baseline that establishes the relationship without overcomplicating it.
Pillar two: Deepen relationships and expand balances
Once the SMB customer is onboarded and using the platform, the focus shifts to making your institution the primary financial home for that business. This is where the competitive threat becomes most visible and where FIs need to understand who they are competing against.
“You’ll be surprised with who your competitors are,” Johnson said. “It’s not just fintechs, but it might be retail stores, might be other third parties. Your deposits are being kept in third-party receivable services.”
He cited research suggesting that one out of every seven deposit dollars flowing through third-party receivable services never makes it into a depository account at a bank. And the companies capturing that opportunity often have far more detailed information about the business than the FI does. Johnson described a scenario he encounters frequently. A banker walks into a meeting knowing only surface-level information about a customer, when the data to drive a genuinely useful conversation has been sitting in the transaction record the whole time.
“You can say, ‘We noticed that you have receivables problems. We’ve got some solutions here that the bank makes available that are really easy to implement,’ ” Johnson said, describing the kind of insight-driven outreach that becomes possible when FIs put their data to work. “In a way, you start to tie the insight back to the products that solve that specific need to that business.”
This is the phase where Q2 Innovation Studio becomes essential. With more than 150 pre-integrated fintech partners available through Innovation Studio—covering everything from cash flow management and payroll to merchant services and accounting—FIs can offer the operational tools SMBs are already seeking without losing those customers to outside providers. Deployment timelines for Innovation Studio integrations typically shrink from several months to a matter of weeks, which matters enormously for resource-constrained teams.
Q2 Positive Pay and Instant Payments Manager round out the recommended tools for this phase, embedding the FI into the day-to-day financial workflow of the business and enabling secure, flexible payments.
Pillar three: Scale and differentiate
By the time an SMB relationship reaches the third pillar, the goal shifts from retention to competitive advantage for both the FI and the business. This is where personalization, vertical specialization, and composable technology come into play.
Q2’s Composable Dashboard, which became generally available for small business earlier this year, enables FIs to tailor the digital banking experience to the specific needs of different business types. For example, a property management company has different daily banking needs than a dental practice or a solar installer, and the dashboard can reflect that.
Jenkins emphasized that this kind of customization starts with a willingness to change the vocabulary.
“We all have the secret vocabulary that we talk about,” he said. “We talk about ACH, and we talk about addendas, and we talk about SEC. And that group”—meaning the vast majority of small businesses below $10 million in annual revenue—“has no idea what we’re talking about.”
The Composable Dashboard also enables what Johnson described as a closed loop between data, insights, and action. Using Q2 SMART and Q2 Discover, FIs can surface personalized messages to SMB customers based on their actual behavior within the digital banking experience, such as identifying a business that writes a high volume of paper checks and presenting a targeted message about fraud exposure and positive pay enrollment.
Closing that loop between insight and offer is the critical component to strengthening SMB relationships. “You’re now making (the relationship) more valuable for a business owner that’s not stopping by the branch every week like they used to 10, 15 years ago,” Johnson said.
And the shift away from the branch is no small thing, Jenkins pointed out. In the early 2000s, branch location was the top reason a small business chose its financial institution. Today, it barely cracks the top 10, with most of the leading selection criteria now related to digital experience. The FI that builds the most useful, most personalized, most embedded digital experience wins the relationship—and keeps it.
The bigger picture
Sustainable SMB deposit growth comes from strategy and sequencing, not from feature velocity or rate competition. Success doesn’t come from launching the most products the fastest. It comes from building the right relationship at the right pace, using data to understand what each business needs, and deploying tools to meet those needs before a competitor gets there first.