New FIS Study Finds Larger U.S. and U.K. Banks Are Vulnerable to Losing Critical Small-Midsized Business Customers

A new study from financial services technology leader FIS™ (NYSE: FIS) has identified key gaps in the performance of larger U.S. and U.K. banks in serving the needs of their critical small and midsized business (SMB) client base.

The FIS study found that while SMBs in both countries are generally satisfied with their banking providers, many of those businesses are considering switching banks – particularly customers of larger financial institutions – to take advantage of other available services or more competitive fees. This comes at a time when SMBs are dramatically increasing their use of digital banking and payment tools to handle a variety of financial transactions and activities.

The findings are part of the 2018 FIS Performance Against Customer Expectations (PACE) report, which surveyed consumers and SMB decision makers on how well their banking providers are meeting their needs.

“Our research shows that larger banks are missing key opportunities to meet the growing digital needs of their important SMB customers,” said Bruce Lowthers, chief operating officer, Integrated Financial Solutions, FIS. “These findings are particularly concerning at a time when SMBs look to their banking partners to help them capitalize on favorable economic conditions to drive growth. Banks of all sizes have an opportunity to leverage their trusted status to provide these very important clients with the modern offerings they need to grow.”

Larger Banks Vulnerable to Attrition

The study found that more than 80% of surveyed SMB customers in the U.S., and 70% of SMB customers in the U.K., are satisfied with their primary banking providers. However:

• In the U.S., SMBs report higher satisfaction with services from community banks over larger banks. Most of the SMBs that have switched banks, or plan to, are customers of larger banks.
• In the U.K., nearly one in four SMBs – most of which use larger banking providers – are planning to switch banking providers in the next 12 months
• Common reasons cited by SMBs in both countries for switching banks are uncompetitive fees, dissatisfaction with services/products provided, outdated bank processes, or being declined for a business loan/line of credit.
• SMBs in both countries report difficulty in obtaining reliable and accurate information from their banks, especially larger institutions, without visiting a physical bank branch.

Growing Adoption of Digital Tools