July 26, 2022 | Stamford, CT — High levels of turnover in bank staff—particularly among relationship managers—appear to be eroding perceptions of the quality of service banks are delivering to some small businesses and middle market companies. 

The dramatic change in economic conditions this year has increased pressure on U.S. companies, and in certain cases, their relationships with their banks.  The proportion of companies switching banks as a result of pricing of loans and other banking products increased by 18 percentage points in the 6-month period between January and June of this year. 

Of companies that have recently switched banks, 44% say dissatisfaction with the relationship manager or other representative assigned to their accounts contributed to their decision to leave. This friction is to be expected in an era where so many banks are merging and/or integrating systems, teams, and strategies. 

Business owners and executives participating in a recent Greenwich Market Pulse complain about employee turnover and incoming staff who are unfamiliar with their industry and/or their company-specific situation, citing examples such as being difficult to reach on the phone, and individuals that are unable to answer questions or resolve issues in a timely manner. 

“Since the start of the year, the share of companies saying they switched banks in part due to the original providers’ lack of knowledge about their business jumped,” says Chris McDonnell, Head of Digital Benchmarking at Coalition Greenwich. “That should be a red flag for banks that are projecting growth as a result of combining portfolios.”

There are no signs that these issues are abating. To the contrary, when asked what factors might drive them to consider switching banks in the next year, roughly half the companies in the study mention better customer service—up from just 35% in January. Likewise, the share saying they would consider switching banks for better relationship manager coverage increased to 39% from 31%.

For banks looking to capitalize on these trends by winning over companies dissatisfied with their current providers corporate owners and executives have on additional clear message: Show up in person. 

“At the start of this year, only about a third of small businesses and mid-sized companies wanted banks soliciting their business to visit them in person,” says Chris McDonnell. “Today, almost 55% want bankers to show up in person.”