Big businesses embrace banks

The big four have collectively reached their highest satisfaction level among medium businesses, with the current rating of large businesses also at an all-time high. 

In the latest findings from DBM Consultants’ Business Financial Services Monitor, the average satisfaction rating across the big four was 7.8 with the Commonwealth Bank ranked first with a score of 8.3, an 0.2 point increase compared to six months ago, and its highest rating among this business segment. National Australia Bank and the Australia New Zealand Banking Group were also both sitting on their highest ever ratings – 7.9 and 7.8 respectively. 

“This unprecedented degree of satisfaction from larger businesses will be welcomed by the big four especially given the high value and strategic importance of these customers,” DBM account director Tim Honcoop said. 

DBM Consultants measures medium businesses with an annual turnover of $5 million to $50 million and small businesses with an annual turnover of between $1 million and $5 million. High satisfaction with the banks were also consistent in these sectors.  The results cover the period from January to June this year. 

In the medium business segment, three of the big four secured a rise in their satisfaction levels in June – their highest ever rating in this sector – with ANZ up from 7.1 to 7.4 and NAB and Westpac improving slightly by an 0 0.1 point to 7.7 and 7.7 respectively. 

The Commonwealth Bank also rose by an 0.1 point to 7.8, which is just below its highest ever rating among medium businesses. 

Within the small business segment - Westpac climbed from 7.3 to 7.6 over the past month, equalling its highest ever score. Westpac also leads the way in this segment, with CBA and NAB, both on 7.2 

Most of them bank with one of the majors, so they do need to feel the love from them. 

An under-served market 

However, the solid satisfaction levels in the larger and medium sized businesses were not mirrored in the microbusiness end of the market – businesses with turnover of less than $1 million.  

In fact, satisfaction rates with the big four sunk to the lowest among small businesses, according the survey. Both CBA and Westpac were on 7.1, just ahead of NAB on 7.0 and ANZ on 6.9. 

“These micro businesses may be small in size,” said Honcoop “but there are around 1.8 million of them in Australia, and most of them bank with one of the majors, so they do need to feel the love from them. 

“We know from our research that the big four are doing many things right in their eyes, but that these micro businesses have higher levels of expectation these days. This is potentially why their ratings are lower than they have been over the past couple of years.”

According to Honcoop, switching is not easy to do but there may come a time when the satisfaction levels of these microbusinesses fall even lower and switching becomes a necessity.

Research by RFi Group reveals that the smaller businesses are under-served in the market, particularly from a lending perspective. 

“Banks are less likely to lend to smaller businesses as they are deemed too risky and lack financial data or collateral,” RFi Group research director Amit Khan said. 

RFi data suggests there is certainly unmet demand for credit amongst SMEs, especially to meet cash flow requirements. 

“A large proportion of these businesses don’t approach banks because they think they will be rejected, don’t have enough financial history,” Khan said. 

“Another factor is that smaller businesses are less likely to have relationship managers – which affects satisfaction levels.” 

 

 

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