Small businesses sit at the center of most economies, driving employment, growth, and innovation. Yet their relationship with traditional banks has often been shaped by standardized approaches that do not always reflect the realities of how different businesses operate. For Nicki Bull Bisgaard, Founder and Group CEO of PayTech Group, this disconnect represents a significant opportunity for banks to rethink how they engage with one of their most important customer segments.
“The way many banks treat small businesses is appalling,” Bisgaard says. At its core, the frustration stems from banks relying on standardized products for a segment that is inherently diverse, then presenting that uniform approach as meaningful service.
Small businesses are typically grouped by size, often by employee count or revenue. That segmentation makes reporting easy, but it hides what matters operationally. A café, a plumber, a boutique hotel, an architecture firm, and a bicycle repair shop might all sit under the same “under 10 employees” label, while their cash cycles, expenses, and risk profiles look nothing alike. “The fact you’ve got fewer than 10 employees doesn’t necessarily mean they have the same requirements,” Bisgaard says.
Defined by diversity and treated as if uniform
Traditional banks keep applying consumer-era logic and one-size-fits-all product design to small businesses, then wonder why fintech competitors keep gaining ground. The mismatch is especially visible in industries where revenue is seasonal or location-dependent. Tourism-heavy regions, such as parts of Spain, can see dramatic swings in cash flow based on peak seasons, while agriculture has its own cycle entirely, yet banks still build lending, credit limits, or cash management tools that flex with those realities.
“There’s hardly any bank anywhere who got a really tailored program towards the farming industry,” he says, noting that many institutions claim they do, but often fail to reflect the practical realities farmers face.
That failure is not just a missed chance to be helpful. It is a missed opportunity to price risk accurately and deepen relationships. A bank that understands a business’s seasonal patterns can design credit that matches cash inflows, reduce defaults, and create stickier customer ties. The data already exists inside banks. The problem is how little of it is turned into insight or action.
The flaws in “relationship banking”
Relationship banking has increasingly become a title rather than a discipline, with limited continuity, context, or proactive insight guiding client engagement. An episode at PayTech Group, founded by Bisgaard to advise banks, fintechs, and payment providers on payments strategy and transformation, illustrates a broader structural issue in how banks have hollowed out the very idea of relationship management after several years passed without any substantive engagement from an assigned account manager.
When Bisgaard eventually engaged with the assigned contact, it became clear that the relationship was largely administrative rather than advisory. Asked what she understood about the business after years of oversight, the response reflected last-minute preparation rather than institutional knowledge of the client.
The bank could have seen PayTech Group’s transaction mix, including significant U.S. dollar activity, and initiated conversations about currency accounts or hedging. It could have noticed patterns in revenue timing, offering ways to smooth cash flow during thinner periods. It could have connected hiring activity to advisory support on pensions or employee benefits. “All of which is information she has,” he says. “It’s there, it’s just not presented to her in any relevant way.”
Leverage, not need, shapes what banks build
Bisgaard argues that the small business segment is underserved because it lacks leverage. Large corporates negotiate. Wealthy individuals get bespoke attention. “If you’re the plumber, your leverage is zero,” he says. That dynamic influences not only service levels, but product design itself.
One common shortcut is to repackage consumer products as business offerings. “Very often in the card space, they would take a consumer card, stick business on it, change a couple of the discounts, off you go,” Bisgaard says. It looks like innovation on a product sheet, but it misses what small businesses actually need, such as time savings, cash flow support, and tools that reflect how the business earns and spends.
While reviewing a business card program in Eastern Europe, he found perks that were effectively irrelevant to the customer base. The bank had offered discounts with an American airline to business customers, only to discover that the vast majority of those customers traded locally and the airline didn’t even fly to the country. “It’s an extreme example of how little thought oftentimes goes into providing the support that small businesses actually need,” he says.
Banks may defend standardization as operationally necessary, but Bisgaard isn’t buying it. “It’s not rocket science,” he says, pointing to straightforward adjustments such as credit lines that expand or contract with predictable seasonal cycles. The challenge is not the number of products on the shelf. It is whether those products adapt to specific needs.
The real vulnerability: small businesses are easier to win away than banks assume
For years, banks pointed to stable retention as evidence that their small business model was sufficient. Bisgaard sees that assumption breaking down as meaningful alternatives gain scale.
Many small businesses, he argues, remained not because they felt well served, but because competing banks looked largely the same. That dynamic is shifting as neo-banks and fintechs deliver simpler, faster, and more intuitive experiences. “The small business segment is where the banks are most vulnerable,” Bisgaard says. “It’s so easy to take the small businesses away from the banks and we do see that happening already.”
A generational shift reinforces the risk. Among younger customers, traditional high street banks are no longer the default, and those preferences are likely to carry forward as new businesses are formed.
What is at stake for banks and the broader economy
The core issue Bisgaard’s insights point to is the role banks play in supporting the economy. Small businesses create jobs, sustain local communities, and drive growth, yet are frequently treated as a low-priority category with generic products and minimal advisory depth.
“I’ve got a lot of time for people setting up their own business, risking it, going for it,” he says. “I don’t think they’re getting the respect the acknowledgment or the support that they require and deserve.”
Treating small businesses as a simplified segment may feel efficient, but it is increasingly risky. The data exists to do better. The institutions that redesign service models around what small businesses actually do, how they earn, and how their cash moves will not just defend market share. They will rebuild trust with customers who have been paying for “relationship banking” without receiving it.
Follow Nicki Bull Bisgaard on LinkedIn or visit his website for more insights.
