Apiture, a leading provider of digital banking solutions, today released key findings from a Q1 2025 Datos Insights online survey of more than 1,000 U.S.-based small businesses on Winning Market Share Among Millennial-Run Small Businesses. The study finds that more than half (55%) of millennial-run small businesses would prefer to bank with a community financial institution if it offered similar products and capabilities to a large bank.

To attract and retain these businesses, financial institutions must adopt strategies that appeal to younger owners. This report examines millennial-run small-business expectations and provides recommendations for community financial institutions to best position themselves to win in this segment. It explores areas such as payment preferences, invoicing and money management tools, interest in AI use cases, and other expected digital banking capabilities.

"The small business landscape is rapidly evolving, and the expectations for success are higher than ever. Community institutions must adapt to the needs of millennial owners, or they risk losing one of their most valuable customer segments and revenue streams," said Christine Barry, Strategic Initiatives Leader, Research at Datos Insights. "Those that prioritize ongoing investments in their digital banking capabilities, offer new payment methods, and develop a forward-looking roadmap tailored to today’s increasingly digitally savvy small business owners will best position themselves for success."

Key findings include:

• Modern digital banking capabilities are a must for millennials: 95% of millennial-led small businesses bank online and over 70% rely on mobile banking; this demographic values speed, flexibility, and robust functionality.

• Desire for more payment options: 50% of millennial-run businesses would switch institutions for more payment options and 38% would do so for real-time payment capabilities. Among those businesses not yet using real-time payments, 37% aren’t doing so because their bank or credit union doesn’t offer it.

• Invoicing and money management tools are essential: 73% are willing to pay for banking products and services that help their business more effectively and accurately manage its finances, while only 9% of millennials state they are not willing to pay for banking products and services. This represents a stark contrast from the common industry belief among institutions that small businesses are not willing to pay for products.

• Millennials value the efficiencies AI promises: 39% of millennial-run businesses describe themselves as very comfortable with the greater use of AI within banking, and 25% of non-millennial-run small businesses share this sentiment. Millennials especially value the improved automation, reporting, and efficiency gains that AI promises to deliver.

"Understanding how younger generations prefer to bank is critical for financial institutions to remain relevant and competitive. Our research with Datos Insights provides valuable insights to help banks and credit unions compete with larger players, attract younger business owners, and ultimately grow deposits while retaining existing accounts,” said Apiture CEO Chris Babcock. “At Apiture, we are dedicated to delivering the cutting-edge online and mobile banking solutions needed for community institutions to thrive with younger consumers and achieve long-term success."