Executive Briefing: Rewriting the Commercial Banking Playbook

Square now holds an average of $35,000 in deposits from mid-market businesses— funds that traditionally resided with community banks.

This isn't an isolated trend but part of a systematic strategy by fintechs to capture traditional commercial banking relationships. Jack Dorsey himself highlighted Square's "accelerated adoption among larger sellers" in their latest earnings call, with mid-market businesses now representing their fastest-growing segment. 

Our collaborative research with 15 banks across the country reveals a concerning pattern: commercial banking customers are increasingly splitting their financial activities between traditional banks and specialized platforms that integrate seamlessly with their business operations. 

We call this "silent switching"— where customers maintain minimal deposit relationships while shifting transaction volumes and operational accounts to integrated fintech platforms.

The central insight? Your commercial customers no longer view banking as a destination but as a component within their business operating systems. This shift fundamentally changes how they evaluate banking relationships— increasingly…