January 31, 2023 | Stamford, CT — Almost two-thirds of U.S. commercial executives say it is becoming easier to do business with their banks.
This is good news for U.S. commercial banks, who have been working hard to address persistent complaints from small businesses and midsize companies about frustrating experiences in opening accounts and other basic banking tasks. The bad news is that younger corporate executives who will eventually take over these companies remain unimpressed.
About 64% of the business owners and executives participating in the recent Greenwich Market Pulse say improvements by their banks are making it easier to do business. These respondents cite two important steps their banks have taken to upgrade service and improve the client experience. First, the best banks have improved relationship manager coverage by limiting turnover and ensuring that companies have a single point of contact who understands their business, responds promptly to requests and effectively addresses any issues. Second, market leaders have enhanced their digital capabilities to further simplify interactions with the bank.
“The important finding is that the investments banks have made to address operational pain points and improve the experience for their commercial banking clients are starting to pay off,” says Chris McDonnell, Head of Community, Commercial and Digital Banking at Coalition Greenwich.
Failure to Communicate With Young Clients
Overall client satisfaction scores remain low in U.S. commercial banking relative to other banking segments and other industries. These more modest ratings are driven by a range of factors, including burdensome KYC requirements, high RM turnover, and inconsistent levels of support following the COVID-19 crisis and PPP process.
One of the most concerning issues for commercial banks is that their youngest clients are the most critical of their banks’ communications. Forty-six percent of commercial executives age 31 to 40 cite “poor” communication from their bank. This is a disappointing share, and one that diverges sharply from other age cohorts. Only about 1 in 10 commercial executives in other age groups give below-average ratings for their bank’s communications.
The variance among these groups is most likely attributable to differences in preferences, behaviors and expectations across generations. In the younger segment, 60% of respondents name mobile phone as one of their preferred channels for communicating with their lead banks. That share reaches only 45% in older age brackets. Younger executives are also more likely to prefer email, and are the only age cohort in which not a single respondent lists “visits to the bank branch” as a preferred way to interact with their banks.
“Younger executives are digital natives,” says Chris McDonnell. “They grew up using Uber and Spotify, and are surprised when client experience from commercial banks falls far short of expectations. It’s a gap banks will have to bridge to maintain their relationships as the next generation takes over.”