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Wednesday, May 22, 2024
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Banks Work Harder to Satisfy Small-Business Customers

Small-business customers are a lot harder to please than regular folks when it comes to banking services.

That’s the take of J.D. Power and Associates in a report released Nov. 5 measuring the satisfaction of small-business customers. Now in its second year, the study is based on 6,400 responses from small businesses with annual revenues from $100,000 to $10 million, surveyed between July and September.

The study based its findings on seven factors: transaction methods; relationship with a banking representative; products; fees; statements; convenience; and problem resolution.

Jeff Taylor, senior director of the banking practice at J.D. Power, noticed one key change in this year’s responses.

“This year, small businesses were looking for broader types of info,” he said in an interview following the study’s release. “Last year, they wanted information on bank products and services. But, now, they also are interested in general economic advice, advice about mergers and acquisitions and wealth management.”


Shifting Needs

Why the change? Taylor admitted that, “Honestly, I don’t know.”

“The environment has gotten more complex for small businesses now, and they have less access to loans,” said Taylor. “In a more competitive environment everyone is looking for an edge.”

As for why small businesses tend to be higher maintenance than regular customers, Taylor isn’t surprised.

“We see lower satisfaction among small businesses, and this is understandable given the complexity of services offered,” he said. “There are just more moving parts, and you don’t have a parallel in the retail environment.”

While there are going to be “difficulties and bumps in the road” in these relationships, said Taylor, “There are opportunities for improvement in small-business satisfaction, focusing on personal relationships, getting closer to customers, and understanding their business needs.”

According to the study, it’s an effort worth making: The average small business has a deposit balance of more than $255,000 compared with more than $7,000 among retail banking customers.


Key Concerns

Some tidbits:

– Communication emerged as one major concern. Nearly 60 percent of small-business customers polled reported no contact from their financial institutions; and 30 percent reported that a teller was their primary contact with the bank, although they would prefer to be in touch with a key decision maker.

– More than 20 percent of small businesses reported having experienced a problem in the past 12 months , nearly double the percentage of retail banking customers. The most commonly reported problems are processing/transaction errors (30 percent), and disputes on service charges (26 percent), followed by poor customer service (10 percent).

Ten of the 22 banks in the study ranked above the industry average, based on numerical scores. In descending order these are Commerce Bancorp Inc., Citizens Bank, Washington Mutual Inc., LaSalle Bank Corp., Capital One Services Inc., Branch Banking & Trust Co., KeyBank, Wachovia, Fifth Third Bank and National City Corp. The remaining banks, in descending order, are HSBC Bank, American Express Co., SunTrust Banks Inc., PNC, Union Bank of California, Chase, US Bank, Wells Fargo, Citibank, Regions Bank, Bank of America and Compass Bank.

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