Over Two-Thirds of Midsized US Businesses Are ‘polybanking,’ Survey Finds 

Midsized businesses in the U.S. are moving away from traditional single-bank relationships in favor of a more diversified approach, according to data insights platform Codat. The data comes from a survey of 500 midsized businesses earning between $10M and $1B, and found that 68% now work with more banks than they did three to five years ago, making ‘polybanking’ the new banking relationship norm.The data found that 50% of businesses surveyed work with three or more banks, signalling that competition is intensifying in the midmarket, and technology is emerging as the top differentiator. Bank of America and JP Morgan Chase came out as the leading primary banks for most businesses, but their competitive advantage isn’t just customer service—it’s technology. Roughly one-third (33%) of finance leaders say advanced online features are their top priority when choosing a banking partner.Despite the dominance of major banks, businesses are sourcing just 63% of their financial services from their primary institution, highlighting an increasing reliance on alternative providers. More than a third (37%) of mid-sized businesses are now engaging with fintechs or neobanks to fill gaps left by traditional banks.As businesses increasingly rely on cloud-based apps for a comprehensive view of their financial health, they are becoming more willing to share their data in exchange for smarter, more tailored financial services.Over half (53%) of businesses surveyed are open to the idea of granting banks continuous access to their financial data—provided security measures are robust. Trust remains overwhelmingly high, with 99.6% of businesses stating they trust banks with their financial data, offering traditional players an opportunity to reinforce relationships before fintech competitors take a larger share.“Half of mid-market companies work with three or more banks, with many also engaging lenders, fintechs, or neobanks,” said Joey Rault, Chief Revenue Officer at Codat. “Banks aren’t just competing with their clients’ existing financial partners—they’re also fending off new challengers constantly vying for a foothold. To secure primacy in the mid-market, they must offer not only comprehensive financial solutions but also deeply personalized service that strengthens loyalty and sets them apart.”For more information, visit Codat’s blog.Companies In This Post