This week, NECC in partnership with Smart Money People has launched the results of the North East Business Banking Pulse.
Generally, business banking has been somewhat of an enigma in terms of the level of service they receive and whether or not they are facing barriers accessing the finance they need to grow their business. The changing nature of the banking sector, through the emergence of digital banks was another aspect to take into account.
Over 200 businesses took part in the survey and there was a 71% satisfaction rating from respondents which is good to hear. However, if you look deeper into the results, just 19% reported receiving good or excellent customer service, demonstrating that there is still room for improvement, but that things are moving in the right direction. Another interesting figure to mention is that only 7% of businesses indicated a desire for better access to capital.
The rise of digital banking is an area that many are keeping an eye on. Interestingly enough, only 12% of businesses reported using two or more financial providers, in a sign that North East businesses are looking to take advantage of a range of niche financial firms for items such as foreign exchange or working capital. It will be interesting to see whether the rise of digital competitors such as Atom Bank, or existing banks that have not fully tapped into the business sector such as Virgin will have an impact on this, especially as just 4% of North East businesses indicated that they were thinking of switching providers.
The impact of digital banks is likely to be felt by start-ups and emerging SME’s – the convenience offered by these from the outset, such as the use of apps and everything being managed online will be something that new innovative businesses may find attractive. However, 21% of those surveyed mentioned that they frequently use a local branch, a big advantage that new digital banks will be unable to match; but whether this will be a game changer remains to be seen. It will be interesting to see if these trends change over time when competitors fully launch over the next couple of years and to see if they will have a significant impact.
Summary of Findings:
- Business banking has an overall satisfaction rating of 71%
- High account charges (particularly around foreign exchange) and a long account opening process were the two biggest sources of frustration, commented on by 30% of all respondents
- 19% of all respondents felt that they received good/excellent customer service
- 12% of all businesses now use two or more financial providers
- 17% of all respondents want more/better relationship management
- Better access to capital (overdrafts/loans) was cited by just 7% of businesses as an area for improvement
- 5% of all respondents would like to see better access to business planning / financial advice
- 3% of all respondents told us that they would like better interest rates for positive balances
- 4% of all businesses mentioned that they were thinking of switching
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