Summary: Many large banks do not offer services and support needed for small business, such as access to capital and latest business banking tools. Check if your company sees warning signs that it’s time to look for a new bank, and the steps to go about making the change.
Is your business bank meeting your needs with the products and services they offer? Do you feel appreciated for your business with your financial institution? If you answered no, you aren’t alone. In a survey of small business owners by J.D. Power in 2018, 68% of respondents said their banks don’t understand their business and 63% did not believe their bank appreciated their businesses. When you’re dealing with the livelihood of yourself and your employees along with the health of your business, these rates are unacceptable. Here are the signs you can watch for that indicate it’s time to move on to a new institution.
68% of respondents said their banks don’t understand their business and 63% did not believe their bank appreciated their businesses.
5 Warning Signs It’s Time to Change Business Banks
Here is some helpful information on whether it is time to make the switch to a new banking institution:
Your fees are through the roof. Fees for services, maintenance, in-network ATM usage, bill pay, incoming wire transfers, transaction minimums—the list is endless. Your business bank should support your banking needs, rather than force you to comply with confusing fee structures.
You have to visit a banking branch in person. The modern world operates online, at all times of day and night. When you are working hard to grow your business, you shouldn’t concern yourself with needing to schedule time in your day to commute to a branch location, wait on other customers, and deal with banking tasks face to face—not when there are plenty of banking solutions that let you manage everything online from your computer or mobile phone.
Business tools and services are extra. Many banks have focused on enterprise customers when offering tools and services that help businesses manage their financial needs. Consult an account representative to compare features that are offered to bigger businesses in order to see what you are missing.
You can’t get financing. More than a quarter of all small businesses can’t get a loan. Considering financing is a major part of quick, sustainable growth, access to capital should be a deciding factor in whether or not you stay with your current business bank.
Your business is just another transaction. There are banks that hold a vested interest in your success, offer personalized solutions, and treat you with respect for your time and business when dealing with customer service. If you are experiencing long hold times and have little to no relationship with anyone in your banking system, it may be time to seek other, more supportive options.
Tips For Switching to a New Business Bank
If you’ve determined that your business bank isn’t offering all that it should to bolster your success, here are a few tips for finding a new one:
Know which features you actually care about.
Take time to write a list of non-negotiable, negotiable, and irrelevant features so that you aren’t distracted by the “shiny object syndrome”. For example, for some on-the-go business owners, mobile banking access is a priority. However, less than half of respondents in J.D. Power’s survey utilized mobile banking, and the robustness of this feature may vary greatly between institutions. If this is important to you, make sure the app does exactly what you need, otherwise, move on.
Be aware of your transaction volume.
Many small business banking solutions charge fees for each transaction over a certain threshold each month. If you have a high transaction volume, these fees can quickly eat into your profit negating other benefits such as lower interest rates and high-interest business savings accounts.
Check online reviews.
When you compare financial institutions, most banks will list interest rates, transaction costs, minimums to open an account and similar data. However, you’re not likely to find any information about customer experience. For example, you might find that some banks, especially those that exist without brick-and-mortar locations, at face value have excellent offerings but may have severe limitations in customer service. For example, some business customers have reported random glitches that prevented access to their accounts, halting business and consuming valuable time trying to resolve the issue.