Women who own small businesses in the United States are overall more satisfied than their male counterparts with their banking experience, according to the J.D. Power 2015 U.S. Small Business Banking Satisfaction Study. Additionally, 73 percent of women are optimistic about the outlook for their business—compared with 69 percent of men—which likely is contributing to their satisfaction.
The study, now in its 10th year, measures small-business customer satisfaction with the overall banking experience by examining eight factors: product offerings; account manager; facility; account information; problem resolution; credit services; fees; and channel activities. Satisfaction is calculated on a 1,000-point scale.
Overall satisfaction among small business banking customers is 754 in 2015, down from 766 in 2014. Overall satisfaction with their banking experience is higher among women, who own 35.4 percent of small businesses in the United States, than among men (766 vs. 746, respectively). Further, women are more satisfied than men across all factors, with the widest gaps in product offerings, account activities, credit services and fees.
With higher satisfaction and a more positive outlook on their business, 35 percent of women say they “definitely will not” switch banks in the next 12 months, compared to 32 percent of men.
“Banks are paying attention, and they have to as the number of women-owned small businesses in the U.S. has grown to 9.9 million,” said Jim Miller, senior director of banking at J.D. Power. “With their optimistic outlook, women are likely to want to grow their business, which means their banking needs will also increase, specifically their need for more credit.”
Miller noted that while there remains room for improvement, it is refreshing to see that banks are effectively meeting the needs of women-owned businesses in the United States, as that is not always the case in other markets. Finding that as many as 70 percent of women-owned businesses are unserved or underserved by financial institutions, S&P Capital IQ recently launched its SME (Small and Medium Enterprises) Scorecard to provide a consistent and transparent lending framework for financial institutions.
Miller pointed out that banks also are focusing on minority-owned small business. “Asians and Hispanics are the two fastest-growing ethnic populations in the U.S., so the expectation is that their ownership of small businesses also will increase,” said Miller. “Looking forward, it is very important for banks to help minority-owned businesses open their doors and grow.”
Overall satisfaction with their banking experience is highest among African-American small business owners (785), followed by Hispanics (781), Caucasians (754) and Asians (744).
- Having a trusted account manager is a critical aspect of the business banking experience. Overall satisfaction is 825 when a bank manager is a trusted adviser to the small business owner. However, when the account manager does not establish themselves as a trusted adviser, satisfaction drops to 636, lower than the 716 when no account manager is assigned.
- Satisfaction diminishes as the business ages. Satisfaction is highest among owners who have been in business two or fewer years at 796, and drops to 770 among those who have been in business between three and nine years and dips further to 751 among those who have been in business 10 years or longer.
- More than 8 in 10 (86 percent) small-business customers with high satisfaction (overall satisfaction scores of 900 and above) say they “definitely will” recommend their bank, compared to just 6 percent of those with low satisfaction (599 and below). Additionally, 66 percent of highly satisfied customers say they “definitely will” stay with their current bank, while only 8 percent of customers with low satisfaction say the same.
- Satisfaction for owners extends beyond their business. Among owners with high satisfaction, 75 percent also have personal accounts with their primary bank, compared to 54 percent of those with low satisfaction.
Small-business banking satisfaction regional rankings
Chase ranks highest in small-business banking satisfaction in the West region for a third consecutive year and in the Midwest region, performing particularly well in product offerings; facility; credit services; account manager; and channel activities.
TD Bank ranks highest in small-business banking satisfaction in the Northeast region and performs particularly well in product offerings, facility; fees; account information; and channel activities. Citibank ranks highest in the South region and performs particularly well in product offerings; fees; account information.
The 2015 U.S. Small Business Banking Satisfaction Study includes responses from nearly 9,000 small-business owners or financial decision-makers who use business banking services. The study was fielded from June 2015 through August 2015.