Ask a bank CEO how digital is going and you will hear about the mobile app. That answer is a generation out of date. Digital banking today is not one race, it is three that run simultaneously, retail, business, and treasury, and in my years either as a bank executive or a consultant advising this industry I have yet to meet an institution winning all three. The retail race is settled and the trophy is worth less than it looks. The business race is being lost quietly, one new account at a time. The treasury race is being re-run right now on new rails, and it is the one with the profit pool attached. Cutting across all three is the fact nobody puts in the strategic plan: the digital gap between the largest banks and everyone else is widening, not closing. This commentary opens a three-week series on digital banking and the vendors who build it, and it starts where every honest assessment should, with the scoreboard.

Front We Won, Sort Of - Retail

Retail digital banking is settled as a matter of consumer behavior. The FDIC’s national household survey found 48.3% of banked households now use mobile as their primary way to reach their bank, up nearly ninefold in a decade, and the ABA’s latest consumer survey puts channel preference at 54% mobile app against 9% branch, with 2025 the first year baby boomers ranked the app first. The argument about whether customers want digital is over. Everyone won it.

Which is exactly why the trophy is worth less than it looks. J.D. Power’s 2026 retail banking study, 107,000 customers, found industry satisfaction essentially flat while the average customer now holds three deposit accounts across different institutions and 20% moved money away from their primary bank within three months, up from 17% a year earlier. Digital made banking better and loyalty weaker at the same time, because the same app that serves your customer makes it effortless to be someone else’s customer too. The competitive news is more interesting than the doom headlines suggest: J.D. Power’s direct banking study found established banks' digital offerings beating neobanks on checking satisfaction by 52 points, largely on problem resolution, the unglamorous work of actually fixing things. But scale is real regardless: Chime reported 10.4 million active members and its second consecutive profitable quarter this summer. The retail lesson for 2027 planning is not “buy more features.” It is that service inside the digital channel, not the channel itself, is now the battleground.

Front We Are Losing - Business

Here is the number I would put on every planning session agenda this fall. Among banks under $100 billion, 72% offer digital account onboarding to retail customers, and only 47% offer it to small businesses (Bank Director’s 2026 Technology Survey). The industry built the digital front door for the customer segment with the thinnest margins and left the door shut for the segment every strategic plan claims to covet.

The customers noticed. The Federal Reserve’s small business credit survey shows the share of applicants going to online fintech lenders rose from 17% in 2020 to 29% in 2025, now second only to the largest banks and ahead of small banks. On the deposit side, Mercury, the fintech built on business banking, holds conditional approval for a national bank charter. And yet the same research offers the counterpunch banks keep missing: small banks fully approved 57% of credit applicants, the highest of any lender type, while their applicants reported higher satisfaction than online-lender customers, 60% of whom faced costs above expectations. Banks still outperform fintechs in business banking; they simply make it harder to become a customer.

J.D. Power’s small business study adds the strategic point: 84% of business owners keep their personal accounts at the same bank as their business accounts, and those who do are 64 points more satisfied. That is the primacy flywheel: business and personal relationships reinforcing each other, spinning in the direction set by the account-opening experience. At most institutions today, that direction is out the door.

Front Being Rebuilt - Treasury and Cash Management

A note on terminology: the industry uses two names. Community banks have long sold cash management, ACH origination, wires, positive pay, remote deposit, and sweeps, while larger institutions call the expanded suite treasury management, adding liquidity and connectivity. It is one product family whose naming generally follows client size, and it deserves to be treated as its own front, not a subset of business banking. Business banking wins the relationship; treasury and cash management monetize it. This is where the fees live, and its foundation changed while most banks focused on the other two races.

The Fedwire wire system completed its migration to the ISO 20022 message standard in July 2025, meaning every US wire now carries structured remittance data, the invoice information corporate clients have wanted attached to payments for decades. Instant payments crossed into treasury scale: The Clearing House’s RTP network set a single-day record of $8.62 billion this spring, with volumes approaching $500 billion a quarter under a $10 million transaction limit that makes real corporate use cases routine. The 2025 AFP payments survey, underwritten by J.P. Morgan, shows business checks falling from 33% to 26% of B2B payments, and, tellingly, only 40% of migrated organizations extracting value from ISO 20022 yet. The plumbing is new; the products on top of it mostly are not.

Fraud is the tax on this front, and it is being underpaid. The 2026 AFP fraud survey, underwritten by Truist, found 76% of organizations experienced payments fraud last year and 74% faced business email compromise, while only 17% of treasury teams use AI for fraud prevention. A bank whose corporate portal pairs instant payments with fraud controls the client can configure has a treasury product. A bank that resells rail access has a commodity.

Four Tiers, One Scoreboard

Our team at CCG Catalyst summarizes the state of play:

And the tier problem cuts underneath all three. The CSBS annual survey of community banks found only 31% offer online account opening and 44% online loan applications, with cost and implementation capacity the top technology barrier; the median technology budget at banks under $100 billion is $1.72 million (Bank Director, 2026). Meanwhile J.D. Power’s digital banking study shows national banks' app satisfaction at 723 and climbing, powered by a 49-point jump in problem resolution, while midsize banks fell 27 points. The gap is widening at the exact moment customers hold three accounts and compare daily. Credit unions face the same mathematics with a sharper edge: NCUA data shows 4,250 federally insured credit unions, down 161 in a year, serving a record 145.8 million members, consolidation driven substantially by technology economics. And through all of it, the branch paradox holds: the industry still operates more than 76,000 offices for the 9% who prefer them, while the digital channel that serves the majority fights for budget.

What I Tell Management

Three pieces of advice, one per front, and a fourth for the tiers. On retail, stop funding feature parity and start funding service quality inside the app: the 49-point problem-resolution swing at banks is the largest satisfaction movement anywhere in the data, and it came from operations, not design. On business, treat digital onboarding as the strategic investment of 2027, because the 47% statistic is not a technology gap, it is a growth strategy sitting unexecuted, and the primacy flywheel pays 64 points of loyalty to whoever spins it. On treasury, build the product, not the pipe: structured data plus instant rails plus configurable fraud controls is a package corporate clients will pay for, and two of the three arrived in the last eighteen months. And on tiers: if you are a community institution, your digital ceiling is set by your vendor before your strategy is even written, which is why tomorrow’s Sector Spotlight maps the digital banking vendor landscape, who owns whom, who serves banks, credit unions, or both, and who is actually winning deals.

My final comment - the industry spent twenty years asking whether customers wanted digital banking, and the customers have answered so completely that the question now embarrasses the asker. The 2027 planning questions are now different: which of the three fronts can your institution win, what will that choice cost, and can your vendors deliver before the gap above you widens further? Three races, one budget. Choose accordingly.

Tomorrow’s Sector Spotlight, “The Digital Banking Vendor Landscape,” maps the vendors behind all three fronts, from the public pure-plays to the core-attached platforms to the independents, with the consolidation scorecard that explains who is buying whom and why.

CCG Catalyst advises banks, credit unions, and fintech companies on digital strategy, vendor selection, and contract negotiation. If your institution is deciding which front to win, reach out to our team at www.ccgcatalyst.com.

See our latest announcement: CCG Catalyst’s Paul Schaus Named a 2026 Top Consultant by Consulting Magazine

By: Paul Schaus | Founder & Managing Partner, CCG Catalyst Consulting

Disclaimer: The views expressed in this article represent the perspective of CCG Catalyst Consulting based on our direct experience advising financial institutions. This commentary is intended to stimulate industry discussion and does not constitute legal, accounting, or regulatory advice.