Banks are more effective in helping small-business owners navigate the present market conditions with improved digital tools and more supportive relationship managers, the J.D. Power 2023 U.S. Small Business Banking Satisfaction Study published Thursday finds.
Compared to last year, small-business owners are more hopeful about the future, with nearly 54% saying their business is financially healthy, though inflation is taking a toll, the study noted.
Capital One bumped Citi from the No. 1 position in the small-business banking customer satisfaction index this year. U.S. Bank and Chase occupied the second and third positions, respectively. First Citizens Bank, Citi, Bank of America, KeyBank and Regions Bank are among the top 10 lenders in the banking satisfaction study this year.
“Small-business owners say that banks have reduced friction in digital and telephone banking services, while improving the courtesy and knowledge of branch staff and relationship managers,” Paul McAdam, senior director of banking and payments intelligence at J.D. Power, said in the study. “These improvements are paying off in the form of increased utilization of bank advice and significantly higher overall satisfaction and advocacy scores among small-business customers. Banks can continue this positive momentum by blending digital services and human support with generative AI-driven technologies to improve personalization and customer engagement.”
The satisfaction study calculated from May through August this year is based on seven factors, including trust level, people, banking flexibility, account offerings, digital channels, problem solving and guidance on saving time and money.
Around 7,104 small-business owners using business banking services participated in the survey.
The 2023 study highlighted some key findings, including an increase in the overall satisfaction with phone-based assistance as small businesses found it easier to reach the right people by phone. Satisfaction with digital channels like websites and mobile apps also grew due to speed, visual appeal, navigation, information clarity and service range.
Small businesses look for financial advice from their bank, and currently, around 57% of small business customers are receiving this service from banks. They seek advice on avoiding fees, spending and savings guidance and improving creditworthiness.
Relationship managers played an important role in driving up the satisfaction index, according to the study. Overall relationship manager satisfaction goes up this year due to improved responsiveness, more frequent communication and a growing view that relationship managers act as partners in business growth, the study found.
Though some of the key metrics saw an uptick this year, sole proprietors is the only category that did not show much improvement, according to the study. Satisfaction is lower among these owners for problem resolution. They are also less likely to utilize bank spending and savings guidance and digital services like spending analysis, budgeting tools and cash flow projections, the study found.
The latest study has seen a marked difference in the satisfaction index. Last year, small-business owners were keen to get advice from their bank partners to navigate rising inflation, supply chain issues and labor market tightness.
They wanted practical advice and a point of contact with whom they could communicate.
“If banks could help small businesses with credit during this challenging time, that will pay handsome dividends in terms of overall satisfaction and loyalty,” McAdam said last year.