Treasury management has long been the white whale for many regional and community banks. The siren song of commercial deposits, fee income, and “sticky” relationships has executives declaring, “We need to be in treasury management!” with the same delivery as Michael Scott declaring bankruptcy in The Office.
It’s easy to see why. In an environment where net interest margins are on Ozempic, commercial deposits and non-interest income are lifelines. And treasury clients (the ones who move millions daily and pay you fees for the privilege) can be the kind of relationships that fundamentally change your funding mix and earnings profile.
The dream goes like this: build a robust treasury offering, attract middle-market and corporate clients, win the deposits, capture the payment flows, and deepen the lending relationship. Before you know it, you’re not just a “community” bank anymore, you’re a “player” in the commercial space.
But here’s the first reality check: Wanting it and being able to execute are two very different things.
Technology Used to Be the Problem, But Not Anymore
A decade ago, smaller banks faced a brutal disadvantage in treasury management. The technology was clunky, the integrations were painful, and the digital experience looked like something from the Netscape era. Big banks like PNC, JPMorgan, and Wells Fargo didn’t just win on brand recognition; they won because they had the tech infrastructure to deliver
a slick, integrated, and comprehensive treasury experience that smaller players couldn’t match.
The typical smaller bank treasury experience wasn’t exactly inspiring. Customer onboarding meant paper forms, wet signatures, and multiple branch visits. Reporting was limited to static PDFs delivered by email. Want to integrate with your ERP? Good luck.
Steve Williams wrote about this “miserable state of cash management vendors” over a decade ago.
Fast forward to today, and the picture is different. The fintech ecosystem has exploded with vendors offering everything from commercial online banking platforms that rival the big banks’ portals to integrated payment hubs, real-time cash management dashboards, and API-first architecture. Pricing models have also evolved, and it doesn’t take a billion-dollar tech budget to compete.
The upside? The advantage large banks had in this area has narrowed. But while technology is no longer the insurmountable barrier it once was, neither is it an excuse for not competing.
Here’s where many banks trip over themselves. They believe that if they “check the box” on technology by signing a contract with a top-tier treasury platform vendor, they’ve solved the problem. Spoiler: They haven’t.
A bank can have the shiniest platform in the market, but if its commercial bankers don’t understand how to position treasury services, the operations team can’t support them, and the products aren’t competitive, the institution just bought itself a very expensive ornament.
Treasury management isn’t just about technology. It’s about the people who sell it, the processes that support it, the products that make it valuable, and the culture that sees it as a core business, not a bolt-on.
Banks that treat treasury like an “add-on” instead of a strategic growth driver will end up with the same outcome most smaller banks have had for the last 20 years: a few cash management clients landed by accident and a lingering sense of “we could have done better.”
So, what does it take to become a serious player in treasury management? Here are four key go-to-market components that act as the foundation for a strong offering:
1. Organizational Alignment
Treasury management must be more than a side hustle for commercial bankers. That means:
- Executive buy-in (not just approving the budget, but actively championing the business)
- Dedicated treasury management sales and support staff who live and breathe commercial deposits and payment services
- KPIs and incentives that reward both lending and deposit/fee income generation
Too many banks pay lip service to treasury while structuring incentives entirely around loan growth. If the institution’s bankers aren’t pushing treasury services, it’s time to check the comp plan.
2. Technology Delivery
A bank’s treasury platform should feel modern for both clients and internal teams. That means:
- Integration with the core and CRM so the institution can actually use data to deepen relationships
- Self-service capabilities for clients, reducing operational workload and speeding up service delivery
- Support for multiple payment rails (ACH, wire, RTP, FedNow) without requiring multiple logins or inconsistent interfaces
A bank’s cash management solution isn’t just a service delivery tool; it’s a storefront. If it feels outdated or unreliable, it sends a message about the rest of the bank.
3. Deposit Products
Corporate clients expect flexibility. That means competitive earnings credit rates, tiered pricing, and the ability to structure accounts in ways that support their cash flow cycles.
A bank that hasn’t meaningfully updated its “commercial checking” product since the aughts can expect to lose business to institutions that treat treasury deposits as a strategic asset, not an afterthought.
4. Payment Services
Payments are the circulatory system of a bank client’s business. A bank that can’t move money the way clients need to—securely, reliably, and quickly—is not going to win their deposit balances.
- Offer breadth (ACH, wires, RTP, card) and depth (fraud prevention, dual control, reporting)
- Consider value-adds like integrated receivables, lockbox, or merchant services partnerships to keep more of the payment flow in-house
The more payment touchpoints you own, the stickier the relationship becomes.
So, with the effort required to build out a strong offering, is the “white whale” of treasury management worth harpooning?
We did an analysis of banks with assets between $1B and $100B that have built a strong treasury management offering and compared them to banks overall.
The analysis shows that over the past 12 months, “Treasury Management Troublemakers” have consistently had stronger earnings, deposit growth, and revenue diversification compared to their peers.
While the commitment and resources required to be a serious player can be significant, the payoff is very real.
Treasury management is not a “build it and they will come” game. It’s a strategic discipline that requires the right mix of people, processes, products, and platforms. If you want to compete with the “big boys,” you’ll need to make treasury a core competency, not a side project.
Technology can level the playing field, but only if it’s paired with competitive products, committed sales teams, and organizational alignment from the top down. The banks that win are the ones that see treasury not as a service line, but as a growth engine.
P.S. If you want to talk shop and learn more about what it takes to be a true player in Treasury Management, I encourage you to reach out to Jessica Pinkston, our resident expert and industry vet.
Tristan Green is a director at Cornerstone Advisors. Follow him on LinkedIn.