In a COVID-19 World, Business Banking Customers Have Lots of Questions. How Are Their Banks Responding?

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Barlow Research Associates, Inc., the Voice of the Business Customer, has released Coronavirus reaction: What your business banking customers expect, the first research report in a new series to help financial institutions meet the needs of U.S. small business and middle market companies in the midst of a pandemic.

Businesses are clearly experiencing a great deal of uncertainty in the face of COVID-19. To add to the complexity, the limitations of sheltering in place, social distancing, travel restrictions and work-from-home policies make it increasingly difficult for financial institutions to get in front of business clients to discuss impacts.

Barlow Research fielded a series of online Flash Panel questions from March 18th to March 19th to identify what small businesses ($100K-<$10MM in annual sales) and middle market companies ($10MM-<$500MM in annual sales) expect from their bank and Account Officers as a result of the Coronavirus outbreak. It was clear that businesses are requesting:

  • communication
  • credit
  • flexibility

At a minimum, businesses need to be assured that the bank will continue to be open and operational. However, its the strength and effectiveness of the initial communication that will reassure businesses that the bank will stand by them in uncertain times. We found that direct communication from an Account Officer was one of the most frequently cited ways both small businesses and middle market companies would prefer their primary bank to respond.

Only 12% of small businesses and 37% of middle market companies were contacted directly by their primary contact to ask how the coronavirus will impact their business.

I would have really appreciated my bank to at least call me or email me resources I can use to keep my business going, such as no-interest loans, deferring loans we have, which we are already in the process of doing. But so far, they have not and if they had done that, I would have been really proud of my bank. $100K-<$500K company

Beyond personal outreach from the bank, many businesses focused on how their bank would assist with financing. Access to credit will be crucial during the coming months. In the small business market, this primarily came through as extending lines of credit or offering low-rate, short-term credit solutions. In the middle market, businesses were concerned about whether their primary bank will continue to honor existing credit arrangements.

We will need to borrow huge amounts of money. Our business relates to how schools are doing…. if they stay closed, our business will continue to suffer more. $25MM-<$50MM company

Yet offering credit will likely not be all that is needed for businesses to feel relief. Many businesses are asking for:

  • flexibility and leniency from their bank
  • deferred payments on business credit cards
  • reduced fees on other banking products

The results of this study are predicated on data collected on 431 small business ($100K-<$10MM in annual sales) and middle market ($10MM-<$500MM in annual sales) financial decision makers. Barlow Researchs full report, Coronavirus reaction: What your business banking customers expect, outlines key questions customers need answered and provides aligned action items for banks.

Barlow Research has proudly provided the voice of the business customer to the financial services industry for over 40 years and during these unprecedented times we will continue to provide information to support our clients and the US companies they serve.

The Coronavirus reaction: What your business banking customers expect report is available for purchase.

For information about the report or the Barlow Research Flash Panel, contact:

Marcia Kalfas

[email protected]