Poor Service, Recession Fears to Drive Banking Changes in 2023
Large companies are disappointed with the service they are receiving from their banking partners, according to Greenwich
- Written by Banking Exchange staff
Half of large companies in the US are expecting to change their banking relationships this year due to poor customer service, according to analytics firm Greenwich.
A survey of more than 200 corporate representatives conducted by Greenwich found that even more large corporates could switch banks if a recession hits and restricts access to credit.
The report stated that “complaints about service have become endemic” across corporate banking in the US, in part because of enhanced anti-money laundering and know-your-customer rules that have delayed cash management transactions and account opening.
“These issues have become so prominent that, when it comes to picking providers for key services like cash management, ‘ease of doing business’ is the leading factor considered by large companies, topping even the size of a bank’s credit commitment and pricing,” Greenwich said.
The survey found that the proportion of corporates rating their account opening experiences as “good” or “outstanding” fell from 70% in 2021 to 44% in 2022.
While the report acknowledged that banks have been “working hard to address these issues”, primarily through investment in digitization to streamline processes, it warned that companies were “far from satisfied”.
After an acceleration of investment in technology in 2020 due to the Covid-19 pandemic, companies reported a drop-off in investment in 2021 and 2022. Greenwich reported that 44% of corporates said they had experienced their banks investing into streamlining and digitizing their account opening processes in 2020, but this fell to 33% in 2022.
“Some of the highest-performing banks are improving ease of doing business scores by adopting a high-tech/high-touch service model,” the report stated. “Banks using this approach are building out technology applications while also deploying relationship managers and customer service staff to help facilitate a more seamless experience for customers.”
“Ease of doing business” was the most important selection criteria when choosing cash management providers, according to the survey, selected by 71% of respondents. The size of credit commitment (69%), competitive pricing (68%) and customer service (68%) were all also rated highly.
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