February 6, 2024 — Almost half of U.S. small and midsize companies are worried that their banks are not financially strong enough to protect their business in a period of economic uncertainty.  

Business owners and executives started having concerns about the financial positions of their banks after the March 2023 collapse of Silicon Valley Bank ignited a regional banking crisis that also led to the downfall of Signature Bank and First Republic Bank. Although a fast and aggressive response by U.S. federal bank regulators helped contain the crisis and avoid any additional failures, new data from Coalition Greenwich shows that the effects of this event are lingering in the minds of decision-makers at small and midsize companies. 

In a recent Greenwich Market Pulse, 42% of business owners and executives in the U.S. said they lacked confidence in their banks’ ability to weather economic uncertainty. 

“Less than a quarter of U.S. small businesses and midsize companies are confident in the economic strength of their banks,” says Chris McDonnell, Head of Community, Commercial and Digital Banking Analytics at Coalition Greenwich. 

Winning Back Trust
What can banks do to regain the trust of their commercial banking clients? The first step is being proactive and transparent. 

“Business owners and executives say the solution is not complicated,” says Chris McDonnell. “Bankers should send knowledgeable and effective relationship managers to make in-person visits in which they learn about the company’s needs and provide honest information about the banking relationship.”

At a minimum, bankers should be reaching out quarterly or semiannually to clients. In these discussions, the relationship manager should supplement general information about the relationship with detailed updates about new products or services. Nearly 40% of U.S. small and midsize companies believe their bank’s relationship manager should be more effective at articulating the bank’s full range of products & services. 

Companies are especially hungry for information about data analytics and other digital tools offered by their banks. More than a third of small and midsize businesses do not have a complete understanding of the data and analytic tools their banks provide.

“There is one other service banks can provide to quickly build trust and enhance the client experience: real-time fraud alerts,” says Chris McDonnell. “As digital fraud becomes a bigger risk, protection services is a top factor influencing confidence in banks.”