PROVIDENCE – Small businesses are struggling financially, but their banks don’t appear to be stepping up, according to a new study from J.D. Power and Associates.
Indeed, just 15% of the businesses surveyed said they had received comprehensive financial advice from their banking partners, according to the 2022 U.S. Small Business Banking Satisfaction Study.
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Meanwhile, more than half of small businesses are considered financially unhealthy, suggesting an “enormous opportunity” for banks to step up and help them, according to Paul McAdam, J.D. Power’s senior director of banking and payments intelligence.
“Small-business owners are staring down an increasingly ominous set of challenges that include everything from lingering supply chain issues to inflation to a talent scarcity, and they are looking to their banks for guidance on things like available credit, tips to reduce fees and technology that can benefit their businesses,” McAdam said in a statement. “This scenario presents an enormous opportunity for banks to deliver comprehensive advice that takes into account a full understanding of the company’s business goals and shows real, committed partnership. Right now, most small-business banking customers are receiving only transactional advice or are receiving no advice at all from their bank.”
The study also found that how responsive and helpful banks are to small-business customers directly correlates to their customer satisfaction ratings, with banks that give comprehensive financial advice scoring an average of 82 points higher (out of a 1,000-point scale) than those who gave limited, “constructive” advice. Banks that only offered transactional advice scored 195 points lower than their counterparts with comprehensive advice, the study showed.
The study used customer satisfaction scores to rank the top banks for small businesses. Citi Bank earned the No. 1 ranking, with a score of 706 out of 1,000, while Rhode Island-based Citizens Bank ranked No. 13, with a score of 666. The industry average score was 672.
The study reflects responses from 6,855 small-business owners that use business banking services.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
