By: Ken Chase.
Estimated reading time: 3 minutes
America’s small businesses are struggling to meet the challenges of a deteriorating economy and turning to their banking partners for advice and assistance. According to the recent J.D. Power 2022 U.S. Small Business Banking Satisfaction Study, however, very few of those business owners are receiving the help they need to weather the current economic storm.
In an October 27 press release announcing the findings, J.D. Power offered troubling insight into the state of many small businesses across the country. The Satisfaction Study found that one out of every two small businesses in the U.S. today classifies as “financially unhealthy.”
More than three in four of those small businesses are looking to their banks for financial advice to help them navigate the current economic uncertainty. Unfortunately, a mere 15% of those business owners say that they have received the comprehensive advice and guidance that they need.
The findings suggest that 58% of small business banking customers are receiving only transactional advice from their bank partners. 27% report that their banks provide “constructive advice.” The survey reveals that the tiny minority of business customers who receive the comprehensive advice they need reported an overall customer satisfaction rating of 858 out of a possible 1,000 score—representing significantly higher levels of satisfaction than customers who received only transactional or constructive advice.
A deeper dive into the report’s findings confirms that half of America’s small businesses are either financially vulnerable or experiencing cash and capital issues. Businesses report a number of issues causing those problems, including high inflation, supply chain issues, and hiring concerns.
Surveyed businesses also reported looking to bank relationship managers to provide needed advice, but many noted that those managers have failed to serve as “a partner who acts with the company’s long-term interests in mind and helps the company grow.” Key areas where businesses are seeking bank advice include:
- Guidance to aid businesses as they try to improve their financial position
- Options for reducing bank fees
- Information about how businesses can benefit from using banks’ available technology tools.
As J.D. Power senior director of banking and payments intelligence Paul McAdam noted in the press release, small businesses’ current struggles should be viewed by banks as an opportunity:
“This scenario presents an enormous opportunity for banks to deliver comprehensive advice that takes into account a full understanding of the company’s business goals and shows real, committed partnership. Right now, most small business banking customers are receiving only transactional advice or are receiving no advice at all from their bank.”