Small businesses are less satisfied with Canada's five largest banks than retail customers, says a J.D. Power and Associates study that ranked Sco-tiabank in top spot in terms of satisfaction among this key banking clientele.
The inaugural Canadian small-business banking satisfaction study found that overall satisfaction averaged 728 on a 1,000-point scale, 25 points below satisfaction among retail customers.
Respondents who ranked their bank poorly were more than three times more likely to switch banks. That's a potentially costly decision for financial institutions since small business customers have almost double the deposits of the average retail customer and four times higher loans.
"The in-person experience is extremely important to small businesses and banks need to get it right to maintain and grow these relationships," said Jim Miller, director of banking at J.D. Power.
Scotiabank led with a ranking of 733 points on the scale. It was followed by Royal Bank (725), TD Canada Trust (724), Bank of Montreal (711) and CIBC (689).
The study measured small-business satisfaction in account activities, account management, facility, fees, product offerings, account information, credit services and problem resolution.
It found that nearly two-thirds of Canadian banks assign account managers to small business banking customers, compared with just half of U.S. banks. Yet satisfaction was dragged down severely among small-business customers who found their account manager fell short of expectations.
For example, although overall satisfaction was 828 among small-business customers who perceived their assigned account manager "completely" understood their business, it dropped to 685 among those customers who perceive their account manager did not fully, or only partially, understood their business.
That, in fact, was lower than overall satisfaction rating (693) among those not having an account manager assigned at all.
"Having a relationship manager is a great contributor to small business customer satisfaction, but only when the manager is knowledgeable of the customer's business and can provide tailored advice and personal attention," said Lubo Li, senior director of Canadian financial services at J.D. Power and Associates.
"However, if the manager cannot provide valuable and individualized information, the customer is better off not having an assigned account manager at all."
