Tuesday, February 11, 2020 Stamford, CT USA — Digital banking capabilities are now the most important driver of perceptions of ease of doing business and new data from Greenwich Associates shows that the “effectiveness of digital channels” now ranks as the number-one driver of client satisfaction in small business banking.
“Regardless of whether it’s because small business owners are embracing digital banking or have just accepted the reality that traditional service models are fading, small businesses increasingly judge their banks largely on the quality of their digital tools,” says Greenwich Associates Managing Director Chris McDonnell.
How Banks Can Satisfy Small Businesses: Limit Administrative Headaches
Increasingly, the easiest way for banks to satisfy small business clients is to limit administrative headaches. A raft of post-crisis regulations in the United States has created a compliance environment leading small businesses to complain that they’re bogged down with documentation requirements.
The winners of the 2019 Greenwich Excellence and Best Brand Awards in Small Business Banking have begun a journey to deliver a client experience that captures the best elements of the traditional banker model with the convenience of modern digital channels. At the top of the list of this year’s winners are Frost Bank and Pinnacle Financial, each taking home 15 awards, followed closely by First Citizens Bank at 14.
Regional Banks vs. National and Global Providers
However, it’s no coincidence that the list of 2019 Greenwich Excellence Award winners is dominated by regional and smaller banks. These banks are all delivering high levels of customer satisfaction by integrating new digital tools with traditional, “higher-touch” service models—all to great effect. “For the time being, these providers are striking the winning balance of technology and human service,” says Chris McDonnell.
It’s an open question as to whether these regional banks will maintain their market-leading position as technology becomes an ever bigger part of the business. Over the past several years, national and global banks have been closing the gap between themselves and regional/smaller banks in terms of key metrics like ease of doing business, customer satisfaction and client loyalty. These gains are attributable largely to substantial technology investments in front-office/customer-facing technology, as well as in middle- and back-office applications that are lowering costs and making the banks more efficient.
In order to compete, regional and smaller banks will have to emulate these innovations—often by using their smaller budgets to purchase digital capabilities from third-party vendors. “As digital channels become the defining feature of small business banking, the challenge facing smaller banks will be assembling technology platforms that—even if they are less extensive than those of the biggest banks—have the key functionality necessary to meet the demands of small business owners and executives,” says Chris McDonnell.
2019 Greenwich Excellence and Best Brand Awards in U.S. Small Business Banking
Greenwich Associates evaluated the small business banking platforms of more than 600 banks in the U.S. in 2019. Of these, only 36 had the distinctive quality required to win a Greenwich Excellence Award and only 15 to win a Greenwich Best Brand Award. These awards are based on interviews with over 14,000 small business banking clients with sales of $1–10 million across the country.