Satisfaction with the banking sector remains surprisingly high among micro businesses despite the recent spate of interest rate rises, according to DBM’s latest Business Financial Services Monitor.
Market research organisation DBM Consultants surveyed 7,508 businesses about their business customer satisfaction with the major banks in the month of October. The survey reveals business customer satisfaction with the major banks lifted during the month, with three of the four majors improving their ratings.
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But DBM managing director Dhruba Gupta says it remains to be seen whether the recent increases in interest rates will affect satisfaction scores in November.
“Next month’s BFSM survey results should give us an initial measure on how the market reacted to the out‐of‐cycle rate movements,” he says.
“Interest rates are certainly a factor in satisfaction, but their influence may be limited because most micro and small businesses, which account for more than 97% of all businesses by number, do not have significant borrowings.”
“From a purely business loan perspective, not many [micro and small businesses] have loans, so we wouldn’t expect interest rates to have a negative consequence for them.”
“When you ask small businesses what they’re concerned about, they typically identify the fundamentals – revenue, costs, staff, and a good proposition against their competitors.”
“If you focus on those things and the bank can see that, the bank will always be there for you.”
DBM identifies micro businesses as having an annual turnover of less than $1 million, accounting for 88.7% or 3,662 of the businesses surveyed.
The survey shows satisfaction with Westpac’s satisfaction rating among micro businesses rose from 7.1 out of 10 in September to 7.2 in October, the highest score among the four banks.
CBA remained on 7.1 while ANZ improved from 6.8 to 7.0 and NAB from 6.9 to 7.0.
Gupta says Westpac is currently the “absolute star”, particularly for small businesses.
“It has done things really well over the last six months and [satisfaction] has been steadily growing,” Gupta says.
“We know from general media coverage, that Westpac is investing more into the business market by putting more business bankers into branches and improving their service standards.”
“As of October, Westpac continues the strong run that has been the main feature of business banking satisfaction in 2010, particularly in the small and micro business markets.”
Gupta believes all four majors are targeting micro businesses by attempting to change their perceptions of the banks.
“What we can see from this evidence is that the small business market, as well as the micro business market, is being targeted through above-the line-advertising,” he says.