People today can buy a car through an app, trade stocks in seconds, and deposit a check with a photo. Then they go to work, and if they work in the Accounting Department, they likely spend the day manually re-entering payment data they already entered somewhere else.
That disconnect is no longer just a user experience problem. It’s a competitive one. Datos Insights research released in January 2026 shows that 88% of midsize and large corporate enterprises globally say running banking operations from their enterprise system is important or very important, and 40% cite it as a top factor in choosing their primary financial institution (FI).
The commercial banking industry is at an inflection point, and the conversation at Q2’s CONNECT 26 customer conference made it clear that FIs face a significant opportunity. Embed banking capabilities into the platforms where clients already work, and become the partner those clients can't outgrow.
Legacy payment infrastructure carries three compounding costs that FIs can no longer afford to ignore: client friction that drives attrition, operational drag that strains internal resources, and revenue erosion as payment and deposit volumes migrate to fintechs and competitors who offer what commercial clients are demanding.
A June 2026 report from Datos Insights sharpens the focus on that erosion. Thirty-two percent of check users project declining usage over the next 12 months, not because checks are being eliminated but because businesses have already decided to move away from them. And 87% of midsize and large businesses say they already are or will be using instant payments by the end of 2026. Commercial clients aren’t waiting for their FIs to catch up. They’re making decisions without them.
For Nikhil Bijlani, the pressure is coming directly from clients. Bijlani is senior vice president, customer experience officer and solutions manager at Capital Bank, a $3.4 billion community bank in the Washington, D.C., metro area.
“A lot of this is being driven at our bank by our customers, who are asking, demanding, challenging us to enable them to initiate a transaction and origination through their system of record,” he said. “They don’t want to have to come into the online banking system and do double work.”
Reducing that extra work is the premise behind Q2 Direct Data Services, a suite of solutions designed to enable commercial clients to initiate payments, retrieve account data, and reconcile transactions directly from their enterprise resource planning (ERP) or accounting system without ever logging into the digital banking platform.
Todd Klapprodt, senior product manager at Q2, describes the guiding principle simply: “Technology isn’t supposed to be a new destination. It should be used to basically meet our customers where they are.”
Q2 Direct Data Services levels the playing field for community and regional banks, giving them ERP integration capabilities that larger institutions have long offered through expensive custom development. The suite includes three core products:
The ability to conduct all banking transactions where employees already spend their time is the end goal, but a critical component is that the guardrails established in the digital banking platform also transfer seamlessly to the ERP.
“What we’ve been trying to educate and inform our customers is that … your system of record does not change the process that you follow in your online banking experience,” Bijlani said. “Anything that’s in your policy dashboard, anything that is embedded in your user controls does not change.”
That reassurance is critical. Commercial clients worry that integration means disruption. The reality is that well-executed ERP connectivity preserves every approval workflow and fraud control while eliminating the manual reentry that wastes time and introduces error.
Aneetha Sampath, VP of Product, Payments at Qualia, offered a vivid illustration of what modernization means for end users. Qualia is the real estate industry’s leading AI digital closings platform, used by title companies, escrow firms, and mortgage lending professionals to make the home-buying experience seamless for millions of homeowners each year. Its customers use the platform six to eight hours a day. They want their entire workflow—including payments—to live there.
The gap between that expectation and today’s reality is striking. For many title companies, staff are still overnighting physical checks and waiting 30 minutes or more to confirm whether an incoming wire has arrived. Sampath says that 80% of their workflows are automated through AI, but payments remain stuck in manual processes. The opportunity is measured in outcomes.
“Ultimately, it’s about hours saved for our customers. How can you get this file closed faster?” she said. “When you have this integrated payments experience, then at a click of a button they’re able to initiate the payments and reconcile incoming tracking payments all instantly.”
The impact compounds across the closing process. Disbursements for HOAs, home warranties, and other parties—transactions that often require manually cutting and overnighting checks—become instant, rail-agnostic payments initiated from within the platform. “That’s what the clients are super excited about as the next phase of the industry,” Sampath said.
Qualia works with several bank partners, including Capital Bank, that have integrated with the platform through Q2 Direct Data Services. Each integration follows a playbook, but Sampath is candid that the process takes real effort. Every bank has its own ways of operating, and there is no single unified API standard across the industry. The work of standardizing the experience across banking partners while preserving each institution’s unique controls is ongoing.
Perhaps the most understated statement made about payments modernization is that it’s harder than it sounds. Bijlani described the internal coordination required at Capital Bank as a “full court press”—Risk, Compliance, Audit, Technology, and Marketing all have a stake in the outcome.
“Getting the right players in a room on a call is essential. It is critical that as you get out of this dependency on your legacy system core, which is a mind shift in itself, there is a different language and a nuance that is expected,” he said.
He is also candid about the change management dimension for clients. Title companies accustomed to receiving notifications in a particular format have downstream dependencies on that format. Data must flow cleanly from point A to point B for every system that touches it.
Testing is where the stream gets validated. Klapprodt described an approach that goes beyond checking whether the system works to checking whether the data is right: “It’s not about does it work, but are we getting the results we expect? And when we don’t, how do we bake in robust error handling so that we can provide a very rich user experience to stop the error before it happens?”
Staffing models also need to evolve. The question of who owns the relationship when something goes wrong is different in a world of API-connected systems than it was when a single legacy vendor held everything.
The Datos Insights June 2026 report, “Old Rails, New Tools: Corporate Payments in North America, Europe, and Asia-Pacific,” found that 80% of midsize to large companies are already using or plan to use API-based services. The same survey found that 81% of digital wallet users expect their usage to grow over the next 12 months. Commercial payment portfolios are actively shifting, and the FIs that build embedded capabilities now will be hardest to displace when clients are ready to deepen those integrations.
The question Bijlani poses is one every commercial banking leader should be sitting with: “Is it going to be a fintech that can embed very quickly or is it going to be our financial institutions who start to take these steps to be able to create these kinds of experiences?”
Q2’s roadmap reflects both the urgency and the complexity of that challenge. Planned enhancements to real-time payment notifications, increased reporting frequency, expanded encryption support, and a unified payments API that handles multiple rails through a single integration point are all in development. On the longer-term horizon, Q2 is building toward what it calls vertical SaaS, a single integration point through which workflow systems across industries such as health care, insurance, title, and property management can access the full banking ecosystem.
The path there is incremental, not a single transformation project. It starts with stabilizing existing infrastructure, cleaning data foundations, and taking the iterative steps that make embedded banking not just possible but practical.
For commercial banking leaders who want to hold on to clients who are already exploring alternatives, that work is not optional. It is the growth strategy.