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Many small businesses underserved by their banks

November 9th, 2012

HuntingtonBankAre you dissatisfied with the way your bank treats your small business? Does your banker know your name? Does it offer mobile service?

Small business banking customers, and the economic catalyst that they represent, are not having their expectations fully met by their bank, according to the J.D. Power and Associates 2012 U.S. Small Business Banking Satisfaction Study released today.

While overall satisfaction among small business banking customers averages 736 (on a 1,000-point scale), reflecting a 19-point increase from 2011, satisfaction is still significantly lower than among retail banking customers.

A personal greeting is important

Even given the value that small business banking customers represent to financial institutions, they experience more problems than do retail banking customers and experience fewer of the basic customer-service elements, such as being greeted by name and being thanked for their business, which significantly impact satisfaction.

The study finds that when small business banking customers are greeted by name, the positive impact on overall satisfaction is 106 points. However, this occurs only 47 percent of the time, compared to 64 percent of the time among retail banking customers, representing a 17-percentage-point gap.

This disparity occurs even though small business customers bank in person at the branch more than twice as often as retail customers (36 times vs. 16, respectively, on an annual basis).

“When it comes to customer satisfaction, sometimes it really is the little things that matter. Simple gestures, like greeting customers by name as they walk in, go a long way in providing a satisfying experience,” said Jim Miller, senior director of banking at J.D. Power and Associates.

“Due to the value of their business to the bank, and how frequently they visit the branch, small business banking customers expect, and deserve, a level of service that is greater than that of retail banking customers.”

One solution may be assigning small businesses an account manger but it must be one who understands that particular small business.

The implications of not assigning an account manager who “completely” understands their customers’ business are significant.

Mobile banking for small businesses on the rise

The study finds that among customers who have an account manager who “completely” understands their business, 47 percent say they “definitely will” reuse the bank and 53 percent say they “definitely will not” switch banks, compared with those whose account manager does not fully understand their business, or are not assigned an account manager (19% and 25%, respectively).

While the traditional means of servicing small business customers, such as in-branch banking and providing a knowledgeable account manager, have a high importance weight in overall satisfaction, newer areas of opportunity are emerging as a way for banks to differentiate themselves from competitors.

For instance, mobile banking usage among small business customers has doubled from 2011, from 5 percent to 10 percent year over year, and is nearly on par with retail banking customer mobile banking usage (13%).

Which banks rank highest in satisfaction?

Huntington Bank ranks highest in small business banking satisfaction with a score of 793 and performs particularly well in account activities, product offerings, fees, and account information. Following in the rankings are SunTrust Bank (774) and BB&T (772).

The 2012 U.S. Small Business Banking Satisfaction Study includes responses from nearly 7,246 small business owners or financial decision-makers who use business banking services. The study was fielded from August 10, 2012 throughSeptember 10, 2012.

Customer Satisfaction Index Ranking

J.D. Power Circle Ratings
(Based on a 1,000-point scale)

Customer Satisfaction Index Ranking J.D. Power Circle Ratings
(Based on a 1,000-point scale) For Consumers
Huntington Bank 793 5
SunTrust Bank 774 4
BB&T (Branch Banking & Trust) 772 4
Regions Bank 760 4
Chase 758 4
U.S. Bank 758 4
Comerica Bank 754 4
Union Bank 753 4
TD Bank 752 4
Bank of the West 751 4
M&T Bank (Manufacturers & Traders Bank) 751 4
BBVA Compass 749 4
PNC Bank 746 4
BMO Harris Bank 744 3
Small Business Average 736 3
KeyBank 733 3
Citibank 731 3
Charter One 729 3
Wells Fargo 723 3
Capital One 722 3
Citizens Bank 721 3
Associated Bank 714 2
Fifth Third Bank 713 2
Bank of America 702 2
HSBC 702 2
Sovereign Bank 700 2

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