Member Exclusive, Modern Marketing

Research: SMBs are increasing their banking relationships because they’re not satisfied with any of them

  • Small and medium businesses aren't getting serviced like they would like.
  • So, they're searching for greener pastures and trying new banks.
close

Email a Friend

Research: SMBs are increasing their banking relationships because they’re not satisfied with any of them

SMB pain points are up and their satisfaction with their banks down, according to new research.

The FIS 2019 Performance Against Customer Expectations Report found that the percentage of SMBs indicating they were extremely satisfied with their primary banking providers declined to 37 percent from 42 percent in the previous year’s study.

The PACE report is based on a survey of 586 small to midsize businesses in the United States and gives banks actionable insight into the challenges and opportunities in servicing the SMB community.

SMB satisfaction with their primary financial institution

In general, SMBs are less satisfied with their primary financial institutions than they were a year ago. Companies with $25M to $75M in revenue reported the highest levels of satisfaction.

SMBs cited fees as the top reason they would stop or switch a banking relationship. But if you separate smaller businesses out from larger ones, only 28 percent of companies less than $5M indicated fees were their reason for change, versus 44 percent of firms between $25M and $75M.

For all categories, respondents reported on average 10 percent more difficulties than the baseline, making the case that pain may be more of a driver for change than dissatisfaction.

SMB satisfaction with different types of financial institutions

Historically, around 15 percent of SMB customers are actively involved in reviewing their banking relationships. What stands out in this year’s PACE report is how much higher the churn rate is, not only compared to last year, but when viewed over a longer period.

Much of this churn rate (35 percent) was driven not by switching outright, but by adding secondary accounts with other financial institutions. The average SMB has 2.64 banking relationships – evidence that spread of wallet may actually be the biggest threat for FIs servicing SMBs.

The average SMB has 2.64 banking relationships – evidence that spread of wallet may actually be the biggest threat.

Humans and trust

41 percent of SMBs with a relationship manager are extremely satisfied, compared to 26 percent of those who don’t have an RM. Trust means a lot in financial services and having relationship managers play this role for their financial institutions appears important to boost satisfaction levels and prevent churn.

Relationship managers also play other important roles. “[They] provide a smooth, easy customer experience – Where there are gaps in technology to enable this, RMs can help fill in and ensure that the SMBs expectations regarding enrolment, implementation or customer service are met,” wrote the authors of the survey.

0 comments on “Research: SMBs are increasing their banking relationships because they’re not satisfied with any of them”

Modern Marketing

‘Quick, tangible, teachable moments’: Financial literacy could be the ticket to Gen Z appeal

  • Consumers are putting more importance than ever before on financial literacy, especially Gen Z.
  • As Gen Z takes up more space in the adult population, financial literacy could be a way to get early access to a loyal user base.
Rivka Abramson | July 16, 2021
Modern Marketing

Marcus by Goldman Sachs’ “You Can Money” campaign positions the bank as Main Street’s primary account

  • A new campaign for Marcus by Goldman Sachs features actress Rosamund Pike, as the brand’s character 'M'.
  • The advertising targets the mass market with a message that Marcus is a viable primary account.
Zachary Miller | July 15, 2021
Modern Marketing

Brex’s new campaign shows a company that wants to go deeper into SMB finances

  • The campaign advertises Brex’s all-in-one finance solution that consolidates four services into one dashboard.
  • The campaign targets SMBs with a ‘less is more’ message so owners can worry less about finances and do more to grow their businesses.
Shehzil Zahid | July 06, 2021
Member Exclusive, Modern Marketing

‘You can make investing as regular as your route’: Behind Stash’s new marketing campaign against day trading

  • Stash’s marketing campaign, set to last until the end of this month, has enveloped Union Square’s subway station, spreading the message that anyone can invest, and everyone should invest long-term.
  • Stash’s marketing initiative comes in the midst of this year’s investing boom, as more people than ever are investing.
Rivka Abramson | June 23, 2021
Member Exclusive, Modern Marketing

‘I don’t need you to add a rainbow to your social media’: Daylight’s #CallMeByMyName campaign targets the American Bankers Association

  • The #CallMeByMyName campaign champions for the inclusion of trans and non-binary consumers within financial services.
  • The campaign seeks major financial institutions to redress outdated and exclusionary services and codes of conduct.
Rimal Farrukh | May 18, 2021
More Articles