More than 60% of units sold on Amazon now come from third-party merchants, most of them small- and medium-sized businesses (SMBs). Yet customers rarely think of themselves as buying from those merchants — they are buying from Amazon. The seller owns the inventory, but Amazon increasingly owns the customer relationship, payment experience, and data.
Community financial institutions (CFIs) may be facing a similar challenge. They have spent years watching fintechs chip away at their SMB relationships while the deposit account stayed put, a dynamic referred to as ‘soft switching’. Now, a new layer of soft switching may be emerging.
As stablecoins, tokenized deposits, and blockchain-based payment networks gain traction, businesses are increasingly gaining access to alternative ways to move money, settle transactions, and manage liquidity outside traditional banking rails. The operating account may remain at the bank, but more of the activity — and value — could migrate elsewhere, reducing the CFI’s role in the relationship.
The Fragmentation Problem
The average SMB now uses 5.2 financial service providers — suggesting that while CFIs may be holding the deposit, someone else could be holding the relationship. According to the Federal Reserve's 2026 Report on Employer Firms, the share of small businesses seeking financing from online fintech lenders grew from 17% to 29% between 2020 and 2025. Many of these fintechs now offer lending, debit and savings accounts, bill pay, payments, and cards built directly into the platforms where those businesses already operate.
Digital assets have the potential to take this trend a step further. Historically, even when fintechs captured lending or payments activity, the underlying movement of money still relied largely on traditional banking rails. However, blockchain-based payment networks have introduced an alternative settlement layer, enabling businesses to move funds, pay suppliers, manage liquidity, and settle cross-border transactions without necessarily passing through conventional payment infrastructure.
Many SMBs have recognized this opportunity. Coinbase found that 81% of crypto-aware SMBs are interested in using stablecoins, while McKinsey estimates that B2B payments represented $226B of stablecoin activity in 2025, making it the largest category of real-world stablecoin use.
What’s more, according to a national survey by Accion Opportunity Fund, three in five SMBs in underserved communities are already evaluating cryptocurrency payments as part of their core operations — suggesting this trend is not limited to tech-forward urban businesses.
While still early days, it’s clear businesses are becoming increasingly comfortable with new forms of digital money and the alternative payment networks that support them. For CFIs, this could represent the next evolution of soft switching. A business customer that settles supplier invoices through a stablecoin-enabled platform or pays contractors over blockchain rails isn't necessarily leaving the bank — it may simply be bypassing it. While the operating deposit may initially remain in place, transaction volume, fee income, treasury activity, and customer engagement increasingly occur elsewhere. Over time, if financial institutions cannot support the payment and settlement capabilities businesses demand, even those deposits could become more vulnerable.
How to Spot SMB Soft-Switching Activity
The signals of digital-asset-driven soft switching are visible in a CFI’s existing data, but require CFIs to look beyond standard account retention metrics. Here are four ways to spot this trend.
- Mine transaction data for fintech and platform names. ACH transactions originating from or destined for platforms such as Stripe, Coinbase, Gemini, or stablecoin custodians may indicate that a business is expanding its financial activity beyond the bank's own products and services.
- Monitor declines in payment activity and wire volume. Drops in outbound ACH and wire volumes — particularly for payroll runs and vendor payments — might suggest that a business customer is managing those flows through a third-party platform.
- Watch for a growing disconnect between loans and deposits. A business may continue to borrow from the bank while moving operating funds, payments, and treasury activities elsewhere. The loan remains on the books, but the relationship may be less central than it appears.
- Track treasury service usage. Declining use of treasury management tools is an early indicator that a business is handling those functions elsewhere, potentially through a fintech or digital asset platform that offers integrated alternatives.
How CFIs Can Counter Soft-Switching
Despite the encroachment, CFIs retain structural advantages that fintechs and digital asset platforms cannot easily replicate — particularly in lending, local market knowledge, and the ability to serve as a true financial hub. Here are four strategies to help defend your SMB relationships.
1. Expand treasury and payment capabilities. Businesses increasingly expect seamless payments, integrated cash management, and real-time visibility. CFIs that make it easy for customers to manage money are less likely to see activity migrate elsewhere.
2. Integrate real-time and blockchain-based settlement options. As money moves faster, banks need to keep pace. Whether through FedNow, RTP, or emerging blockchain-based networks, offering faster settlement can help keep payment activity within the relationship.
3. Consider offering tokenized deposit solutions. Tokenized deposits combine the trust of bank deposits with the speed and programmability of blockchain settlement. While still emerging, they offer a potential way for banks to modernize payments without ceding ground to stablecoins.
4. Double down on relationships. Technology may facilitate transactions, but relationships drive loyalty. Regular conversations, strategic advice, and a deep understanding of customer needs remain powerful differentiators in an increasingly crowded market.
Soft switching in the SMB segment has long been more subtle than its retail counterpart. Digital asset infrastructure has the potential to make it even harder to detect, as payment, treasury, and liquidity activities migrate onto platforms that sit outside the traditional banking relationship. Businesses that adopt stablecoin-enabled payments or other blockchain-based solutions may not move their deposits, but they may gradually move more of their financial activity elsewhere. For CFIs, the challenge is not simply retaining accounts but remaining central to how customers move and manage money. The institutions that combine modern payment capabilities with strong commercial relationships will be best positioned to preserve that role in the years ahead.
