The Nomis Narratives

Business banking has always lived in the gray area between consumer and commercial. It’s a “tweener” segment that is often underserved not because of lack of opportunity, but because of the operational and economic complexity it introduces. Every institution sees the potential: business banking customers offer attractive fees and low-cost deposits, relationships are sticky, and there’s plenty of room for cross-sell. And yet, profitability remains elusive in most financial institutions. 

In an era where margin pressure is high and differentiation is difficult, business banking presents a rare opportunity: a segment rich with potential but burdened by structural inefficiencies. 

Why? Because business banking can’t be easily categorized. 

On one hand, it's too complex and risky to treat like consumer banking. These customers demand multi-user access, cash flow-based credit, and treasury services that stretch well beyond consumer offerings. On the other hand, the volume is too high and the average relationship too small to justify the bespoke underwriting, structuring, and white-glove service of a commercial relationship. There’s simply not enough revenue to go around. 

The industry has made strides on the service side with self-service digital onboarding, embedded treasury, and loan decisioning using alternative data sources. But when it comes to pricing, most institutions are still stuck. Flat rate sheets, inconsistent exceptions, or burdensome RAROC calculators are the norm. 

The Decision Point 

At the heart of the challenge is a choice: should you price and manage business banking more like consumer or more like commercial? The answer isn’t binary, but the framing helps clarify where your institution falls on the spectrum, and what infrastructure is needed to support that strategy. 

For example, if your institution frequently overrides standard pricing for high-volume depositors but lacks a centralized tracking mechanism, you may be straddling the spectrum without a clear strategy. 

The Pricing Spectrum 

From scalable automation to bespoke deal-making—where does your pricing model live today? 

Path 1: The Consumer Approach 

Many large banks are moving more toward consumer-style pricing for business customers, particularly for those at the smaller end of the segment. This approach treats business banking as a volume game with thousands of low-touch relationships managed through scalable infrastructure and standardized offers. It reflects a philosophy that prioritizes automation, speed, and consistency over deep customization. The underlying assumption is that with the right analytics and pricing governance, institutions can still meet most customer needs effectively without the cost or complexity of bespoke handling. 

Benefits: 
• Scalability across thousands of low-touch customers 
• Faster speed-to-market when rates change 
• Consistency across regions, products, and customer types 
• Rich data enables testing and optimization (think A/B pricing, elasticity modeling) 
• Enables true digital self-service and automation 
• Reduced dependence on manual intervention and approval bottlenecks 

Trade-offs: 
• Less room to maneuver on outlier deals or relationship-based concessions 
• Risk-adjusted return (RAROC) often applied in a broad-brush manner 
• Some high-value clients may feel boxed into generic options 

Path 2: The Commercial Approach 

Others still manage business banking like commercial, especially for higher balance, credit-intensive customers. This approach is rooted in the belief that relationship value can’t be fully captured through automation alone. It assumes that flexibility, negotiation, and tailored structuring are essential to winning and growing profitable business accounts. Institutions that lean this direction tend to rely more on experienced Relationship Managers and manual processes, giving them the tools and discretion to handle complexity on a case-by-case basis. 

Benefits: 
• Flexibility to tailor each deal to the relationship’s unique needs 
• Experienced Relationship Managers can negotiate bundled deals, structure rates, and add non-rate value 
• Greater discretion to adapt pricing based on risk, opportunity, and profitability 

Trade-offs: 
• Time-consuming approval cycles that customers hate 
• Inconsistency from banker to banker 
• Prone to over-discounting or RAROC manipulation 
• Difficult to scale, operationally burdensome 

Finding Your Place on the Spectrum 

No two institutions are the same. The right approach depends on: 

1. Customer Base
   Are you serving 50,000 microbusinesses or 500 midsize firms? What’s the deposit or lending potential?
2. Staff Skill Level
   Do you have the RM talent to handle bespoke pricing? Are your frontline staff trained to cross-sell intelligently?
3. Delivery Model
   Are you building digital-first tools or primarily relying on the branch network? How empowered are your channels to deliver tailored offers?

Leading institutions are increasingly shifting left on the spectrum to adopt consumer-like efficiency while preserving important elements of commercial customization. The goal is to codify common patterns in product bundling, discount structures, and pricing rules so that the customer experience feels customized and personal without the commercial overhead. 

What That Requires 

Successfully shifting toward a scalable, consistent pricing model for business banking requires a handful of foundational capabilities: 

Advanced Analytics and Customer Segmentation

You need a clear, data-driven understanding of your customer base. This is not just demographics, but behavioral and profitability indicators. Segmenting customers into meaningful cohorts allows you to design pricing strategies that are responsive, targeted, and economically viable at scale. For instance, separating businesses by lifecycle stage can surface distinct pricing sensitivities and service needs.

A Flexible Rules Engine for Pricing Logic

Static rate sheets won’t cut it. Institutions need configurable pricing rules that can apply different offers based on product type, customer segment, relationship value, or behavioral indicators. This reduces manual overrides and allows your pricing to adapt to shifting market conditions or strategic goals in a scalable, consistent, and compliant manner.

Consistency Across All Delivery Channels

Whether a customer engages through digital banking, a branch visit, or an RM interaction, the offer should reflect the same pricing logic. Omnichannel alignment ensures fairness, reduces confusion, and makes your pricing engine trustworthy to both customers and staff.

Organizational Agility and a Test-and-Learn Mindset

The ability to rapidly test, evaluate, and iterate pricing strategies is a competitive advantage. Banks should invest in infrastructure that supports A/B testing, monitors real-time performance, and allows quick pivots when something isn’t working. Pricing agility means you’re not locked into stale assumptions or bureaucratic approval cycles.

In Conclusion 

Business banking will never be as cleanly defined as its retail or commercial counterparts. But with the right pricing strategy and the tools and governance to support it, banks can finally give this “tweener” segment the attention and profitability it deserves. 

The institutions that succeed won’t be those who choose one extreme or the other, but those who build scalable infrastructure with the nuance to flex. Now is the time to invest in the capabilities that bring discipline to pricing and deliver value across the full business lifecycle. 

If you’re rethinking your business banking strategy, Nomis can help. Get in touch with the team at sales@nomissolutions.com or connect with us via nomissolutions.com to speak directly with our experts! 

Written by: Dallas Wells, Chief Product Officer at Nomis Solutions