In a race against leaner and often more innovative fintechs, banks are stepping up their mobile offerings for small-business customers during the past year — and boosting their customer satisfaction scores in the process.
For example, JPMorgan Chase added a new feature so that small-business owners can directly contact their bankers within its app. It also enhanced QuickPay with Zelle for business customers and allowed small-business owners to easily switch between business and personal accounts.
John McCourt, the head of client relationships for Chase business banking, said the investments in mobile capabilities have provided “an uptick in client mobile engagement and satisfaction.”
JPMorgan isn't alone. Overall, small-business banking customers are slightly more satisfied with the digital capabilities of the institutions that assist them, according to a study released Thursday by J.D. Power.
Banks’ overall satisfaction score rose 2.5% to 820 (on a 1,000-point scale) from last year’s survey. Some 61% of respondents said they are using mobile banking features, compared with 53% in 2018.
Though small, the improvement is notable because banks’ small-business digital efforts have often lagged behind their retail offerings, while fintechs have moved aggressively to offer alternatives.
“If you see more innovation coming from outside the industry, it’s going to get the attention of the banks to either match that capability, or partner with some of these fintech solutions,” said Bob Neuhaus, vice president of J.D. Power Banking Intelligence.
Neuhaus said a key factor driving increased satisfaction is that underserved small-business customers, defined as those without access to an account manager, are turning more to mobile to meet their needs, and banks in turn are investing in more mobile features.
“One of the big challenges in small-business banking has been not having enough account management resources to give the kind of attention to customers they desire; the banks are spread thin,” he said.
J.D. Power found a number of underserved customers are businesses bringing in between $1 million and $2.5 million-plus in annual revenue. Those businesses are relying more heavily on mobile banking than customers bringing in revenues ranging from below $500,000 to just below $1 million.
“What we’ve seen with mobile is that it’s helping the banks address that shortage of account coverage resources," Neuhaus said. "Mobile has had an impact on those underserved customers."
J.D. Power ranked banks by region, with Capital One nabbing the highest score in the Northeast with 850, TD Bank scoring highest in the South (854), Huntingdon capturing the Midwest (852) and JPMorgan Chase in the West (831). It was the seventh straight year that JPMorgan has won that region; it also ranked second in every other region for the 2019 survey.
The study is the result of a poll in June and August of 8,287 small-business owners who use business banking services. The scoring index is determined on how respondents answered various questions about their bank, ranging from responsiveness to account use experience, mobile banking features, the level of trust cultivated by the bank and channel interaction.
Neuhaus noted how banks have regained the trust of small-business customers, which could be helpful as fintech alternatives emerge in the market.
The study average for small-business trust in banks improved to 814, from 785 in 2018. Some 44% of respondents said their bank appreciated their business, up from 37% in 2018.
But respondents indicated they would switch to another provider for a variety of reasons, including better access to credit and more enhanced online tools.
Startups such as Azlo, Bank Novo, Bento, NorthOne and Mercury
McCourt of JPMorgan said banks in general have an advantage over fintech providers because customers want similar experiences between personal and business banking.
“At Chase, many of our business customers also have their personal accounts with us, so we want them to be able to manage all their accounts in one place,” he said.
PNC Bank also echoed those sentiments.
The $393.2 billion-asset bank placed third in J.D. Power’s rankings in the Midwest at 827, and fifth in the South with 835 points.
“We believe that consumers and small-businesses owners have many of the same needs,” said Ehab Hammad, head of business banking for PNC.
“We are working continually to update our digital offering and capabilities so all of our customers, both consumers and small-business owners, have the best possible experience.”
