February 9, 2021 | Stamford, CT — Many small businesses that were disappointed by their banks during the COVID-19 crisis have been shopping for new providers. 

Expected turnover will likely bring new business to banks that stepped up to provide small businesses with the support they needed last year—especially the regional and community banks that took home Greenwich Excellence Awards in Small Business Banking for 2020. 

About half of all U.S. commercial banking clients say the COVID-19 crisis changed the way they view their banks. About 30% of companies are pleased with their banks’ performance during the pandemic and have a higher opinion of their banks than they did at the start of 2020. However, about 1 in 5 companies say the crisis lowered their opinion of their banks. Of these, 85% are either actively seeking a new provider or are open to such a discussion.

“Many small businesses felt like they fell to the back of the queue while their banks focused attention on larger clients,” says Chris McDonnell, Greenwich Associates Head of Digital Benchmarking, Banking & CEM. “In many cases, they were probably right.”

Looking back on 2020, small businesses are much less likely than middle market business to rate their banks as “excellent” in terms of their overall helpfulness during the crisis. Small businesses were least satisfied with the support they received from the largest national banks. In Q2 2020, more than a quarter of small businesses rated national banks as “below average” or “poor” in terms of their helpfulness during the crisis. In contrast, two-thirds of small businesses using regional banks rated their providers as “excellent” in terms of their helpfulness during the crisis, with 81% giving the excellent label to community banks. 

In the short-term, that strong performance during the crisis could earn new business for regional and community banks. Over a longer horizon, however, national banks could be in a position to gain ground in this segment. The reason: Investments in digital banking capabilities made during the crisis have further widened larger banks’ advantage over less-well-resourced rivals.

The impact of national banks’ tech investments might already be visible. The share of small businesses rating the helpfulness of national banking providers as “excellent” increased from 37% to 47% from Q2 to Q3 2020. 

The complete list of the 2020 Greenwich Excellence Award winners in U.S. Small Business Banking.
The complete list of the 2020 Greenwich Share winners in U.S. Small Business Banking.
The complete list of the 2020 Greenwich Best Brand Award winners in U.S. Small Business Banking.