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CIBC Ranks Highest in Small Business Banking Satisfaction
TORONTO — Squeezed by high interest rates on credit and business loans, coupled with increased costs of materials and labour, satisfaction among small businesses in Canada with their primary banks has decreased this year, according to the J.D. Power 2024 Canada Small Business Banking Satisfaction Study,SM released today. Overall satisfaction has declined 21 points year over year to 655 from 676 (on a 1,000-point scale).
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According to the study, satisfaction among small businesses with any amount of debt has declined 33 points, whereas satisfaction has increased 10 points year over year among businesses that have no debt. Debt types also affect satisfaction, with the biggest problem areas being term loans; commercial real estate financing; and Canada Small Business Financing Loan (CSBFL).
“The effect of the Bank of Canada’s recent rate reductions has not yet translated into noticeable relief for small businesses,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power. “Six in 10 small business customers cite inflationary pressure as a key factor weighing on their financial health. This challenging macroeconomic environment also is accompanied by less-than-stellar service delivery from the banks, as evidenced by respondents’ declining satisfaction in areas such as problem resolution, new account opening, automated phone services, and assisted online services such as email, web forms and in-app messaging. To mitigate the negative customer stance derived from the high borrowing costs and inflation and realize strong satisfaction gains as both subside, banks need to improve their service delivery and communications.”
On a positive note, small business customers indicate strong access to credit availability from their banks. While business customers are dissatisfied with borrowing costs, they appreciate having access to credit and the support of their banks during challenging times. A notable 87% of small business customers say they have excellent or good access to credit, and of those that applied for credit during the past 12 months, 86% were approved.
Study Ranking
CIBC ranks highest in small business banking customer satisfaction for a second consecutive year, with a score of 659. BMO (658) ranks second and RBC Royal Bank (656) and TD Bank (656) each rank third in a tie.
The Canada Small Business Banking Satisfaction Study now in its sixth year after having been published from 2012 to 2014, measures satisfaction across seven factors (in order of importance): people; account offerings; allowing me to bank how and when I want; helping me save time or money; level of trust; digital channels; and resolving problems or complaints. The 2024 study includes responses from 2,436 small business owners of—or financial decision-makers at—small businesses that use business banking services. The study was fielded from June through August 2024.
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