Dive into our latest research to see what’s shaping the future of this competitive space.
The middle-market banking landscape is shifting fast—68% of businesses now work with more banks than they did 3-5 years ago. In this unpredictable interest rate environment, becoming the primary operating bank in this segment is no longer just an advantage—it’s a necessity for financial institutions.
Our latest research, surveying hundreds of financial controllers at middle-market businesses, reveals how banks can win in 2025.
Research methodology
To better understand this evolving landscape, we surveyed 500 financial controllers from mid-market businesses across the United States with annual revenues between $10 million and $1 billion. This group represents informed financial decision-makers, offering valuable insights into their organizations’ financial processes—and, by extension, what they need (and expect) from their operating bank.
In the sections that follow, we share key findings from this research and offer actionable recommendations to help banks strengthen relationships and position themselves as the go-to provider for mid-market clients.
Why banks are prioritizing mid-market primacy in 2025
Primacy in banking refers to becoming a business’s primary financial institution (PFI) or operating bank—the central partner they turn to for the majority of their financial needs, from deposits and loans to treasury and payment services. Achieving primacy positions a bank as the cornerstone of a client’s financial operations, enabling deeper relationships and driving mutual growth.
In 2025, the push for primacy in the middle-market has taken on new urgency amid the unpredictable interest rate environment. With borrowing costs fluctuating and economic uncertainty persisting, commercial banks are doubling down on fee-based revenue streams and relationship-driven banking to offset margin pressure.
A glance at the latest quarterly earnings releases from the top 50 US banks reveals a consistent theme: a renewed focus on middle-market businesses as a strategic priority. And it’s no mystery why.
What’s fueling the middle-market boom in banking?
In times of rate volatility, banks must balance risk management with revenue diversification. Middle-market clients—known for their varied financial needs—offer a rich source of non-interest income, making them particularly valuable in today’s economic climate.
Mid-market clients drive significant fee-based revenue services like treasury management, commercial cards, foreign exchange, and payments processing. These services provide a stable revenue stream, helping banks hedge against fluctuations in net interest margins.
Plus, as lending becomes more complex, mid-market companies are prioritizing banks that provide advisory-driven services over transactional relationships.
It’s no wonder banks are laser-focused on achieving ‘primary operating bank’ status in the mid-market. Yet, as many are discovering, it’s a tall order. The competition is fierce, and standing out requires more than just ticking the boxes of traditional banking services.
Why banks struggle to become the primary financial institution
Our data reveals that the mid-market banking ecosystem has become increasingly fragmented. 50% of businesses surveyed said they worked with 3 or more banks and 68% are working with more banks than they did 3-5 years ago. Evidently, businesses are ditching traditional ‘monogamous’ banking relationships in favour of a more diversified approach.
This trend is creating an ever-growing challenge for banks competing to secure the coveted status of primary operating bank. It’s no longer just about outpacing other traditional banks—they’re also facing stiff competition from a diverse range of financial institutions, including fintechs and neobanks, which are rapidly gaining ground.
Our research highlights the current market breakdown:
🏦 National banks: 62%
💰 Credit unions: 34%
🤝 Community banks: 33%
📍 Regional banks: 32%
💳 Fintechs or neobanks: 26%
💸 Fintech lenders: 24%
With businesses increasingly spreading their bets, the path to becoming a trusted primary provider is more complex than ever.
Which banks are winning in the mid-market?
A number of large national banks, including industry giants like Bank of America and JP Morgan Chase, are setting the standard in mid-market engagement—and the results speak for themselves.
Bank of America, for instance, reported a 5% increase in middle-market loan balances in Q3 2024, attributing the growth to its tailored strategies designed specifically for this segment. Meanwhile, U.S. Bank is making waves with its digital payment innovations, such as the Commercial Rewards Card, aimed squarely at solving mid-market expense management challenges.
These moves highlight a critical lesson for banks vying for mid-market dominance: success hinges on strategic differentiation.
It’s not enough to offer a one-size-fits-all approach—today’s mid-market businesses demand solutions that meet their unique needs. The banks that recognize and act on this reality quickly are the ones pulling ahead in the race to secure lasting relationships in this lucrative market.
What mid-market businesses want from their operating bank
Mid-market businesses may be diversifying their financial relationships by working with multiple providers, but when it comes to identifying their operating bank, one factor stands out: it’s typically the institution where they store the majority of their money. Our research found the following core products form the bedrock of establishing strong primary banking relationships and fostering trust:
- Checking Accounts (57%): These are the cornerstone of daily operations, enabling seamless cash flow management.
- Credit Cards (46%): Flexible financing tools are critical for managing everyday expenses and capitalizing on growth opportunities.
- Savings Accounts (43%): Businesses rely on these to support liquidity and longer-term financial planning.
Beyond this, our research found that, on average, businesses turn to their primary bank for 63% of their financial products. This finding reveals product diversification as a key ingredient for banks striving to solidify their role as a client’s go-to financial partner.
While product offerings significantly influence mid-market businesses’ decisions to work with a particular bank, our research found that other critical factors also play a major role. Mid-market businesses primarily evaluate banks based on the following criteria:
Advanced online banking features (33.4%): Seamless and intuitive digital banking platforms are no longer a luxury—they are a necessity. Businesses demand tools that streamline operations, enhance accessibility, and provide real-time insights, making advanced online banking features a top priority in their decision-making process.
Dedicated account management (30.6%): Mid-market clients highly value dedicated account managers who understand their unique needs, provide strategic guidance, and act as reliable points of contact. This human touch fosters trust and reinforces the bank’s role as a true business partner.
Customer service and support (30.6%): Exceptional customer service remains a cornerstone of client satisfaction. Businesses prioritize banks that deliver prompt, reliable, and effective support, especially during critical moments.
Customized financial products and services (29.2%): Off-the-shelf solutions often fall short for mid-market clients with complex and evolving needs. Banks that offer tailored financial products and services—designed to align with specific business objectives—gain a competitive edge by demonstrating flexibility, innovation, and a deep understanding of their clients’ industries.
Middle-market banking is changing—banks must adapt to win
The race to become the primary operating bank in the middle-market is more competitive than ever. With businesses increasingly diversifying their banking relationships, financial institutions must go beyond traditional services to stand out. Winning in this space requires more than just offering the right products—it demands seamless digital experiences, proactive relationship management, and tailored financial solutions that meet the evolving needs of mid-market businesses.
Banks that move quickly to address these priorities will secure lasting client loyalty and drive long-term success. The institutions that embrace digital innovation, relationship-driven banking, and product differentiation will position themselves as the go-to financial partner for mid-market businesses.
How Codat helps banks win in the middle-market
To achieve this, banks need deeper insights into their clients’ financial data and the capability to provide tailored solutions efficiently and at scale. That’s where Codat comes in.
Codat empowers banks to build stronger relationships with mid-market businesses by giving them seamless access to their clients’ financial data. This allows banks to deliver faster, smarter, and more personalized solutions—essential for becoming a business’s primary financial partner.
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