Earnings Signal Power Shift as Smaller Banks Push Into Office of CFO

But as recent quarterly earnings and marketplace announcements across the financial sector reveal, the barrier to entry for treasury innovation is increasingly lowering. It’s no longer just the J.P. Morgans and Citigroups of the world that are targeting the enterprise back office as a key business line. A host of smaller and regional lenders are launching new treasury management products and real-time platforms to help their business clients modernize their payment processes and expedite real-time money movement.

On Wednesday (April 29), PNC launched a new payment-focused treasury management product, while a few days earlier on April 23 Regions Bank announced a digital treasury management solution designed to help its clients move away from older, manual and time-consuming processes that include paper documents and physical checks.

Elsewhere, on Tuesday (April 28), treasury solutions provider Qolo launched an expanded partnership with KeyBank that includes a virtual commercial card program designed to help businesses more easily monitor and handle payments.

In earnings calls, banking executives increasingly framed these investments not as cost centers but as growth engines, underscoring that it is no longer just the biggest banks out there that are capable of building more stable and diversified businesses.

And smaller lenders are already seeing the benefits of expanding their offerings into the office of the CFO. The KBW Nasdaq Regional Banking Index, which tracks banks with assets under $100 billion, has returned around 24% year-to-date.

Read more: Treasury Teams Shift to Mobile Platforms to Manage Real-Time Cash

Smaller Banks Embrace Strategic Pivot Toward the Back Office

Treasury management, traditionally associated with cash positioning, liquidity forecasting and payment orchestration, is evolving into a high-value service line. For large banks, it has long been a cornerstone of corporate banking. BMO, for example, on Monday (April 27) debuted a business banking and treasury management platform for small- to mid-sized businesses and emerging middle market customers.

For smaller lenders, however, the economics of treasury management historically didn’t justify the investment in infrastructure and talent.

That calculus is now changing. Earnings reports from regional banks across the Midwest and Southeast show growing non-interest income tied to treasury services, with executives highlighting new product rollouts in digital payments, automated receivables and real-time cash visibility tools. Credit unions, too, are entering the conversation, leveraging cooperative structures to fund shared technology platforms.

At the core of this pivot is a recognition that treasury services are sticky. Unlike lending relationships, which can be episodic, treasury management embeds a financial institution into the daily operational workflows of a business. Once integrated, switching providers becomes costly and disruptive, creating a durable revenue stream.

Meanwhile, the rise of FinTech infrastructure providers has lowered the barrier to entry. Companies like FIS, Fiserv and Jack Henry & Associates are enabling smaller institutions to deploy sophisticated treasury capabilities without building them from scratch.

Cloud-native architectures and application programming interface (API)-driven integrations also make it easy for regional lenders to plug into payment rails such as The Clearing House RTP® Network and the FedNow® Service. This access is critical. Real-time payments are no longer a differentiator; they are quickly becoming table stakes for corporate clients seeking to optimize working capital and reduce settlement risk.

The result is a democratization of treasury technology. Smaller banks can now offer services that rival those of global institutions, often with greater customization and responsiveness.

Read also: Can Your Treasury Function Put Money to Work Immediately? 

Why CFOs Are Paying Attention

For corporate finance leaders, the emergence of new treasury providers comes at a moment of heightened complexity. Supply chain disruptions, interest rate volatility and evolving regulatory requirements have placed a premium on liquidity management and cash forecasting.

Research by PYMNTS Intelligence in collaboration with Ingo Payments shows that 39% of small and medium-sized businesses (SMBs) function with less than a month’s operating cash at the ready, which makes them highly vulnerable to even slight interruptions to their payment cycles.

“They’re under pressure to move faster, but often their internal tools haven’t kept pace,” Jennifer Sanctis, managing director of CashPro at Bank of America, told PYMNTS about treasury teams, pointing to fragmented systems and delayed insight into cash positions. “Speed without visibility creates risk and visibility without speed creates bottlenecks.”

At the same time, additional data from PYMNTS and Visa research has shown that cash-flow certainty is closely linked to confidence in growth. When finance leaders can trust their liquidity position, they are more willing to invest, extend supplier terms and accelerate payroll or vendor payments without fear of shortfalls.

Without the legacy systems that often constrain larger banks, smaller lenders can iterate more quickly and tailor solutions to specific industries or client segments. In some cases, they are embedding treasury tools directly into accounting platforms, blurring the line between banking and software.

This shift is particularly relevant for middle market companies, which have historically been underserved by large banks yet too complex for basic commercial banking products. For these firms, regional lenders offering advanced treasury services represent a compelling alternative.