November 29, 2014

Small Business Owners Report Less Satisfaction With Banks

Small business owners desire certain things from a business bank — specifically, collaboration, openness and a good working relationship. However, a recent study from consumer satisfaction research firm J.D. Power and Associates reveals those needs are going unmet.

The U.S. Small Business Banking Satisfaction Study showed that small businesses’ overall satisfaction with their banks has dropped to 711 on a 1,000-point scale, down from 718 last year. The survey measured customer satisfaction with the overall banking experience by examining eight factors: product offerings, account manager, facility, account information, problem resolution, credit services, fees and account activities.

Small Business Owners Are Growing Dissatisfied With Banks

According to the study, here’s what small business owners value in a business bank:

  • An account manager who understands their business well.
  • Open communication with the account manager.
  • Easy accessibility to the bank both offline and online.
  • Having fees disclosed in advance so there are no surprises.
  • A collaborative relationship or partnership with their bank.
  • Error-free banking.

While small business owners’ perceptions of the financial stability of their banking institution, their personal financial outlook and the economic outlook have all improved this year compared to 2009, this is the second consecutive year that overall customer satisfaction among small business banking customers has declined.

“Despite a sense of optimism in the industry among small business owners, it appears that their financial institutions are failing to keep up with their expectations,” Michael Beird, director of banking services at J.D. Power, said in announcing the results.

As a result of their less-than-stellar customer service experiences, small businesses are more willing to switch banks. Only 19 percent said they “definitely will” stay with their current bank, down from 34 percent in 2008.

“Banks that are able to deliver on key practices and partner with their small business customers have an opportunity to differentiate themselves,” said Beird. He theorized that one reason for the dissatisfaction is that small businesses have fewer sources of capital available than do big companies, and so must rely more heavily on their banks.

The survey of more than 6,000 small business owners also rated specific banks’ customer service. Overall, big banks fared worse than smaller regional banks in the survey. You can download the full survey results at the J.D. Power website.

Editor’s Note: This article was previously published at OPENForum.com under the title: “Small Business Owners’ Satisfaction With Banks is Declining.” It is republished here with permission.

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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

7 Reactions

  1. I am a very small business owner and have used quite a few banks over the years. The only one that really ever impressed me and really took care of me time and time again wasn’t a bank. It was Paypal.

    If only they allowed me to write checks, I would totally ditch my brick and mortar bank for good.

  2. One of the main issues I see with banks is that customers become viewed as costs to be minimized. This perception leads to reduced customer service, less knowledgeable account managers (because good ones command higher salaries) and fees.

  3. Hey Matt,
    I’m impressed to hear this — I usually only hear complaints with Paypal. Thanks for sharing. There must be fully digital bank out there!

  4. Oh, I should mention that one of my favorite “bank” bloggers is a friend of mine: Jim Bruene who runs the blog http://www.Netbanker.com and it is filled great customer service insights, banks and technologies you might want to look at as a small biz (although small biz is not his focus).

  5. The problem with brick and mortar banks is that you create a relationship with the people at the bank and then they leave. You have to start over with each new round of employees. I gave up and went to all online banking after a while. In the end, I don’t think I get better or worse service. Just faster.

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