According to McAdam, small businesses are hungrier for comprehensive guidance than the typical banking consumer. In its study, JD Power found 81% of small businesses are interested in receiving financial advice or guidance from their bank, but only 56% say they’ve received such advice or guidance in the past 12 months.
To help gauge business owners’ need for financial guidance, the survey asked 10 questions about respondents’ financial situation, touching upon everything from their cash flow to levels of debt and insurance coverage. Based on that, they found 40% of businesses were financially healthy, while 36% were vulnerable.
“This is a new study, so we don’t have insight on how business owners’ financial health has changed,” McAdam said. “But out retail banking satisfaction study in Canada saw a large decline in the population of consumers who considered themselves financially healthy from the beginning to the middle part of this year as inflation weighed on everybody. So we’re confident that small businesses are probably experiencing higher stress levels.”
Among small business owners who have a primary contact or relationship manager at their bank, 58% feel that they receive transactional advice. While they’re satisfied with the responsiveness, availability, and how their primary manager makes things understandable, survey participants in that cohort said they have low understanding of their bank’s fee structures, as well as the features and benefits associated with their checking accounts.
“The managers do not understand the small business’s goals, and they’re not really providing advice,” McAdam said. “They’re really just more servicing … it’s not a deep relationship.”
