Small business owners seem to prefer Scotiabank above all other Canadian banks, but overall satisfaction among these customers is lower, mainly due to fees. The insights came from the J.D. Power 2013 Canadian Small Business Banking Satisfaction Study, released today.
From 2012 overall satisfaction with banks dropped ten percentage points, with the largest declines in fees and problem resolution.
“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 J.D. Power’s Jim Miller. “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.”
Small business owner’s feelings towards fees worsened because of changes in small business fee structures, with 39 percent of customers experiencing a fee structure change in 2013. More than one-half (59 percent) 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 percent vs. 30 percent, respectively); however, those who did are less likely to indicate their problem was resolved to their satisfaction, compared with 2012 (74 percent vs. 80 percent, respectively).
Satisfaction declined the most among the largest segment of small business customers (who generates sales volumes between $2.5 million and $10 million), with a 41-point decline to 727 in 2013 from 768 in 2012.
Scotiabank ranked highest in overall satisfaction for a second consecutive year (727 on a 1,000-point scale), followed by BMO Bank of Montreal (725) and TD Canada Trust (724).
The 2013 Canadian Small Business Banking Satisfaction Study measures small business financial decision-makers’ satisfaction with their primary financial institution across eight factors: channel activities; account manager; facility; fees; product offerings; account information; credit services; and problem resolution. Channel activities are comprised of six sub-factors: branch, website, ABM, IVR, call centre and mobile. The study, which was fielded from June 2013 through July 2013, includes responses from 1,018 small business owners or financial decision-makers who use business banking services in Canada.