Banking on APIs: The Modular Future for SMBs
In the battle to attract and retain small business customers, simply offering a business bank account is no longer enough. Today’s small business owners are not just looking for somewhere to store their money. Instead, they’re looking for a trusted partner who can support the entire journey of building, launching and growing a business.
Historically, banks have focused on delivering core financial services, think current accounts, loans and credit cards, through their own vertically integrated tech stacks. But over the past decade, fintech has changed the game. Challenger banks and API-first platforms like Starling’s Engine or Railsr have proven that modular infrastructure can work – even in a challenging regulatory environment like the banking industry.
More importantly, this modularity gives banks the ability to rapidly plug in new services that go well beyond finance and offer services that solve everyday problems for small businesses. Need an invoicing tool? A website builder? E-commerce functionality? Inventory management? With the right APIs and partners, banks can integrate those tools directly into their offering seamlessly, and often white-labelled.
Why does this matter for banks?
For the growth, GTM, product and strategy teams looking to attract and retain small business customers, the implications are significant.
Add immediate, practical value from day one
Small business formation is booming globally, but competition to sign up business owners is fierce. Challenger banks, fintechs, and even non-traditional players like Shopify and Square are all offering financial services. By embedding tools like website builders or e-commerce platforms into the onboarding journey, banks can add immediate, practical value from day one. When a new customer opens a business account, they can also start building their online presence within minutes with no need to leave their app or look elsewhere.
Increase LTV and reduce churn
When SMBs use more than just your core banking services and start to rely on your platform to run their business – you’re no longer just a utility to be switched out when the next bank comes along and offers a tasty ‘switch your business bank account’ offer. Instead you’re the partner that’s built trust by offering value from day one.
Embedded tools can increase engagement, boost product stickiness, and create more cross-sell opportunities. For example: A customer using your invoicing tool is more likely to also take a working capital loan; one running their website through your platform might also be a better candidate for a POS integration.
Differentiate in a crowded market
Most business banking propositions look the same: free transfers, low fees, accounting integrations. But a bundled “business-in-a-box” approach stands out. By offering the operational infrastructure that every SMB needs, you position your brand as a true enabler of entrepreneurship.
The role of APIs in enabling SMB ecosystems
The technical magic that makes all this possible? APIs. They’re what let banks integrate best-in-class solutions without having to build everything from scratch. At BaseKit, for example, we provide banks with a white-label website builder and e-commerce software that can be embedded directly into their platforms via API. That means their customers get a seamless, brand-consistent experience and they get to launch new value-added services in a fraction of the time.
Modern APIs also bring flexibility. Whether you want to embed functionality into your onboarding journey, offer it as an upgrade inside your business banking dashboard, or create bundles targeted at different customer segments – modularity means you can tailor the experience to your strategy.
This approach also aligns well with growing regulatory and open banking trends. Banks that adopt open, composable architectures today will be better placed to adapt to tomorrow’s requirements. Whether that’s integrating third-party data sources, enabling multi-bank connectivity, or embedding financial products into external ecosystems.
From account to accelerator: What a complete SMB journey looks like
Imagine this: a customer opens a business account with your bank. Within the same flow, they’re prompted to register a domain name, create a simple website with AI and add an e-commerce store or booking tool. Next, they get access to a library of marketing tips, tools for invoicing and tax, and a dashboard to track payments and inventory.
All under your brand. All in one place.
This isn’t the future – it’s already happening. We’re seeing leading banks use this kind of embedded approach to transform onboarding into activation, and activation into retention.
The result? More engaged customers, stronger brand loyalty, and a real opportunity to become the go-to platform for small business success.