Small Business

The Biggest Reason SMEs Switch Banks

New report finds small businesses are less satisfied than ever with banks

Written by Advisor Staff

Small businesses’ overall satisfaction with their banks declined this year, according to a J.D. Power study.

The largest drops related to fees and problem resolution, says the report.

“Small businesses are very sensitive to bank fees. Not only are they the primary driver of problems, but bank fees are also the most commonly cited reason for why small businesses decide to switch banks,” said Jim Miller, senior director of banking at J.D. Power.

“Assigning an account manager who understands their customers’ business and works to resolve their problems may help minimize the impact of fee changes, as well as increase both satisfaction and key business metrics, such as advocacy, loyalty and customer retention.”

Key findings:

  • Fees satisfaction declines due to changes in small business fee structures, with 39% of customers experiencing a fee structure change in 2013.
  • 59% of small business customers who indicate they intend to switch financial institution during the next 12 months cite fees as the primary reason.
  • Fewer small business customers experienced a problem year over year 24% vs. 30%
  • Those who have problems are less likely to indicate their problem was resolved to their satisfaction, compared with 2012, at 74% vs. 80%.
  • Satisfaction declines the most among the largest segment of small business customers (sales volume between $2.5M and $10M), with a 41-point decline to 727 in 2013 from 768 in 2012.

Scotiabank ranks highest in overall satisfaction for a second consecutive year (727 on a 1,000-point scale), followed by BMO (725) TD Canada Trust (724), RBC (721) and CIBC (702).

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