Small businesses are still facing challenges, but the current J.D. Power report suggests growing optimism.
Small businesses in America have been on the comeback trail, following the dark days of pandemic lockdowns. Consumer advisory services leader J.D. Power’s 2024 U.S. Small Business Banking Satisfaction Study reveals small business owners are now more optimistic about their future—and feel better about their bank meeting their needs.
According to the just-released study, overall customer satisfaction among small business owners surged 20 points (on a 1,000-point scale) this year with a growing economic outlook and banks providing better problem resolution, people, and financial health support. However, challenges still remain.
“Small businesses are not out of the woods yet,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power. “Increased costs for material and labor are still very much a factor, and future business outlooks have still not risen to pre-pandemic levels, but we are seeing a strong trend toward optimism for the future.”
Significant improvement in several areas drove the 20-point increase in small business overall customer satisfaction. It included problem resolution; branch and phone-based customer service and relationship managers; and guidance to improve the financial health of small businesses.
Small business owners’ outlook score of 7.5 out of 10 significantly improved over 2023 but remains below pre-pandemic levels. In addition to challenges with higher costs for material and labor which impacted 53% of businesses, 73% of small businesses said their creditworthiness is excellent or very good but, down from 75% in 2023.
Small business confidence in banks rose significantly with several factors working together to improve the banking experience. Those surveyed indicated better satisfaction with personal service, technology, products and communication, and advice offered by the bank. Overall, banks were viewed as being sensitive to recent challenges and proactive and more personalized in their service.
The study also revealed that small businesses sought advice from their banks on lowering fees, maintaining their debt and improving their overall creditworthiness. Overall satisfaction with financial health support rose 34 points from the prior year.
A significant part of the study includes the ranking of small businesses’ satisfaction with their banks. For the second consecutive year, Capital One ranks highest nationally with a score of 736, followed by Chase (729) and Regions Bank (712) in third place. The study surveyed 6,976 owners or financial decision-makers at small businesses using business banking services from May through August 2024.
The 2024 U.S. Small Business Banking Satisfaction Study measures satisfaction across seven factors (in order of importance): level of trust; people; allowing me to bank how and when I want; account offerings; helping me save time or money for my business; digital channels; and resolving problems or complaints.
“Many small businesses have come to see their banks as valuable partners…In many cases, banks have really doubled down on support for small businesses…These efforts are paying off in the form of significantly higher customer satisfaction scores,” says McAdams.
