Big and mid-sized banks are making up for lost ground with small business customers, while the regional banks between the big and mid-sized players have lost ground, according to J.D. Powers small business banking satisfaction study.
The big banks benefit from large branch and ATM networks, plus self-service options and personal service. This has enabled those banks to improve their score on J.D. Powers ranking to 768 from 749 on a 1,000-point scale. The mid-sized banks were able to keep small businesses happy with a combination of low fees and improving technology, surging 18 points to 780 from 762. The study, in its ninth year, measures small business satisfaction by examining eight factors: product offering; account manager; facility; account information; problem resolution; credit services; fees and channel activities.
The regional banks showed some improvement, but not as much as their larger and smaller siblings. They increased to 758 from 754. The end results put regionals 10 points lower than big banks, and 22 points lower than mid-sized banks.
Big banks in this study are those with deposits higher than $188 billion; Regionals are between $33 billion and $180 billion; and mid-sized banks are those between $2 billion and $33 billion.
Until now, many regional banks have positioned themselves as having the best of all worlds, with the products, convenience and technology of the big banks and the personalized service of smaller banks, said Jim Miller, director of banking services at J.D. Power, in a press release. While some regional banks remain successful at this, overall the regional banks have lost their lead over big banks in personal service while smaller competitors have passed regional banks in convenience and satisfaction with product offerings. To remain competitive, regional banks will have to develop value propositions that differentiate themselves from their larger and smaller competitors and then flawlessly execute their plans.
Chase ranked the highest in small business banking satisfaction in the West and Northeast regions, performing particularly well in product offerings; facility; account information; credit services; account manager; and channel activities, according to J.D. Power. Huntington National Bank ranked highest in small business banking satisfaction in the Midwest region and performs particularly well in facility; fees; account information; and channel activities. Regions Bank ranks highest in the South region and performs particularly well in product offerings; account information; and channel activities.
Other findings include:
- Overall satisfaction among small business banking customers is 766, up 14 points from 752 in 2013.
- On average, small business customers with high satisfaction have 6.3 business products with their primary bank, compared to 4.8 for those with medium satisfaction.
The study included responses from nearly 9,000 small business owners or financial decision-makers who use business banking services.