In a post on the state of consumer fintech, I took a look at how retail banks are beginning to “unbundle” as tech tries to reinvent finance. I now look at how the same is beginning to happen for commercial banks.

Like it did for retail banking, I think technology is impacting commercial banking in three main ways:

Increasing access to information thereby allowing businesses (businesses here refers broadly to small, medium and large businesses which would be the clients of commercial banks) to make better decisions Reducing the friction/offering better experiences for businesses in conducting common activities Lowering the fees on transactions for businesses by serving as a cheaper middle man

To show how the above unbundling is beginning to happen, I’m going to start with the key activities performed by a commercial bank to see how startups have emerged to serve as a better platform or help perform them more efficiently:

Checking and account management services Loans and financing Merchant services

The unbundling of commercial banking

Checking and Account Management Services

This refers to activities involved in basic day to day operations such as operating a checking account along with other non-core activities banks tend to provide businesses such as paying bills to other internal operations managing cash-flow and payroll, managing accounting and benefits. Most small businesses still use banks to maintain a commercial checking account, but there are a number of startups that either work with banks or enable businesses to conduct their internal operations in a smoother manner.

Products that help with transfers, bill payments, accounting and budgeting include:

Standard Treasury which makes it easier for businesses to deal with their banks through standard APIs that ease transfers and other transactions

Dwolla FiSync which enables financial institutions to offer real-time payments.

Yodlee which provides tools to allow banks to offer more interactive and innovative experiences for businesses and allows for businesses to manage all their accounts in one place through their Small Business product

Currency Cloud which works with financial institutions to improve their cross border payment offering through an API

Xero which provides an online accounting software for small and medium businesses

Quickbooks which is an accounting software for small businesses that is integrated with many banks

Bill.com which enables businesses to receive, route and pay invoices electronically

In terms of activities such as payroll, benefits, insurance and other services, some products that help include: