SME Dissatisfactions with Banking Customer Service

Customer satisfaction is a key foundation of business. Banking clients want to feel satisfied with the relationship and service from the financial institution holding their assets. However, studies show the opposite is the reality. A 2022 study released by J.D. Power showed that half of small and medium-sized businesses are considered financially unhealthy and don’t feel they are receiving great service, stating they feel frustrated due to a lack of communication and information from their bank. Over 90% of SME owners have a business bank account and 61% bank with four of the largest financial institutions. Despite making up 99% of existing businesses in the U.S., business owners feel there aren’t enough products or services at the bank to meet their needs. Many feel product offerings for personal accounts are better than business. Banks and other financial institutions frequently announce, update, and launch products, yet their clients remain uninformed. Where is the disconnect between clients and their bank, and what can the latter do to build the bridge? Why aren’t bankers contacting clients to inform them of ways to improve their operations?

It’s safe to assume that some clients are uninformed of the products and services offered by their bank. For clients who try to access bank resources, most experiences aren’t helpful or pleasant. While there are resources available, clients might not be able to find a solution on their own. Studies show that bank clients want to find solutions before contacting the bank and will go through 50% to 70% of problem-solving efforts. When clients have additional questions, the next natural step is to reach out. However, bank representatives are often unfamiliar with the services available and redirect their clients back to the website. Clients will feel unsupported if they are told to continue solving their problems on their own, using the resource that didn’t help initially. With additional resources like complimentary office space at banking branches, industry-specific education, networking, and mentoring opportunities, business clients should be empowered by their banks to succeed even further by being educated on services to solve their problems.

Over half of business accountholders believe their personal accounts offer better digital resources. There’s an opportunity for one in two business clients to improve their operations if only they knew the options available to assist them. Considering the needs of a business differ vastly from an individual, clients cannot be expected to know what is available, especially if they are unfamiliar with the subject matter. One solution that has grown in popularity is Zelle. Many banks offer the feature to consumers but not to business clients due to the risks of fraudulent transactions. While receiving quicker payments means healthier cash flow and more accurate balances, there are less risky options available.

Better service offerings would enable clients to have more control over their accounts. Bankers should educate clients on services like ACH Origination, Remote Deposit Capture, Lockbox, and Positive Pay and guide clients to the best option to meet their needs. Introducing banking products with added protection and increased cash flow to clients allows them to feel supported through stressful moments and typical day-to-day operations.

Small and medium-sized businesses’ most significant concern is cash flow or lack thereof. Business owners might think a line of credit, loan, or credit card is their only option for liquidity. If banks educate their clients on solutions designed to increase cash flow on a day-to-day basis, accountholders can help ensure they don’t experience an interruption in business operations. Often, liquidity problems are not due to mismanagement or low productivity but rather timing. Businesses that are open seasonally will account for dips in revenue, and not every situation can be planned for (like a pandemic). Business owners are also at the mercy of their clients; they could have delivered work but not yet received payment. A National Small Business Association survey found that more than half of business owners felt they did not get the funding they needed when requested, so options need to be discussed with them throughout the length of the relationship.

While banks have improved ways clients can guide themselves to solutions, a gap needs to be filled. After recent bank failures, 25% of business clients considered changing their financial institution. Banks should reach out to clients to rebuild trust, establish connections, and focus on customer retention rather than customer growth. Retaining a client base is five times less expensive, yet more than 80% of institutions focus on growth. Only 15% of business owners felt they received substantial financial advice from their bank. Reminding clients that their bank is part of the community, available as a support, and can offer resources is the start to resolving customer dissatisfaction with their financial institution.