The trend: Small business customers increasingly expect “best-in-class, highly sophisticated digital capabilities” and integrated experiences, according to a Finovate interview with Shruti Patal, chief product officer for business banking at U.S. Bank. But small businesses have historically been underserved digitally by their financial institutions, especially relative to consumers.

The strategy: U.S. Bank has tried to change that in the past several years by building up its business banking platforms, particularly through partnerships and acquisitions. For example, it has:

• Partnered with Gusto for integrated payroll services and Melio (via its own partner Fiserv) for cash flow management
• Acquired Talech for point of sale systems, Bento for payment and expense management, and TravelBank for travel and expense management

What it means for banks: With digital enhancements for business banking, U.S. Bank and its peers now compete as much with third-party solutions as with each other. QuickBooks is one example: It is reportedly used by 29 million US small businesses for accounting—and offers a checking account in addition to accounting and payroll services.

Other threats lurk upmarket. Ramp and Brex, for example, are fintech companies each with multibillion-dollar valuations that offer banking, expense, accounting, and payments solutions for companies of many sizes.

Our take: U.S. Bank’s moves to modernize its small business banking digital experience are crucial to keeping its offering competitive against nonbank software providers, fintechs, and other banks. Its partnerships and all-in-one model for its business banking platform keep it in the running.