January 26, 2022 | Stamford, CT — After a surge of bank firings by companies disappointed by a perceived lack of support during the early days of the COVID-19 crisis, conditions are normalizing in the commercial banking market. However, bankers cannot afford to rest on their laurels. 

As 2022 unfolds, business owners are asking banks to step up their service and an increasingly seeking an in-person dialogue. Slightly more than one in 10 small businesses and mid-sized companies say they changed banks in the past 12 months. That share (11%) represents a return to historical churn rates following a period of elevated switching brought on by the pandemic. Many business owners and executives felt abandoned by their banks during the crisis—especially in the chaotic early days of PPP applications. Those frustrations caused bank switching rates to surge to nearly one in three companies during that period. 

“It’s a relief to executives and banks alike that we seem to be leaving that volatile period behind us,” says Chris McDonnell, Head of Digital Benchmarking at Coalition Greenwich.

Despite the continued spread of the Omicron variant and concerns about the accelerating inflation rate, the 255 small businesses and mid-sized companies participating in a recent Greenwich Market Pulse Study remain positive in their economic outlook. In this environment, companies are focusing less on their experiences during the pandemic, and more on how well or how poorly their banks perform in core, day-to-day functions. The primary motivation for companies switching banks today is a lack of satisfaction in the coverage representative assigned to the account. 

“Companies that do switch banks are looking for two main things: better overall service and better digital capabilities,” says Chris McDonnell.

In-Person Meetings Matter
During the pandemic, banks’ digital channels allowed many small businesses and mid-sized companies to maintain basic operations. There is no doubt that these capabilities will play a much bigger role in companies’ bank selections in the post COVID-19 era. However, commercial bankers should not become overly reliant on online and mobile channels. 

“The number-one thing companies say a new bank can do to win their business is to make an in-person visit to learn about their banking needs,” says Dana Schwaeber, Relationship Director at Coalition Greenwich.

In the latest edition of its Greenwich Market Pulse, Coalition Greenwich surveyed small businesses and mid-sized companies across the U.S. about economic conditions and industry trends. Among the topics covered were digital transformation in corporate treasury, innovations in payments and perceptions about fintech providers.