Smes Missing Out on a Long-Term Relationship With Their Bank

SMEs experience low levels of satisfaction with relationship bankers – and it could get worse 

Results from a survey of UK SMEs from CivilisedBank, the new UK business bank with a Local Banker network, and Opinium, the award winning strategic insight agency, reveal that despite the importance placed on having a strong relationship with their bank, almost half of UK SMEs (46%) don’t know the availability of their relationship manager or don’t have one at all.

Although the remaining 54% of those surveyed do have a relationship manager, only 18% – less than 1 in 5 – of those with a turnover of £1 million or more state that they are extremely satisfied with their support. Of those with a turnover of more than £500,000, this drops further to 15%, or less than 1 in 7.

The survey also found that the average tenure of a relationship manager is only 2 years[1], highlighting the difficulty around the depth of customer knowledge that can be accrued. As banks cut costs further, questions will be raised as to whether the existing level of service can be maintained or even improved upon by the big banks in the future.

In addition, respondents noted that there are already restrictions as to how involved relationship managers can be: only 43% of those with a relationship manager confirm that their relationship manager is always on call when they need help. There are also questions about their effectiveness: over a quarter (28%) of those with a relationship manager noted that they do not have the authority or ability to make credit decisions locally without having to refer to head office, and a further 22% are unsure whether they have any lending authority.

Philip Acton, Chief Executive Officer, CivilisedBank said:“Our research illustrates that the banking industry should not underestimate the importance of the relationship between a bank and its business customers. However, given how important the personal relationship is, it is striking that only half of SMEs have a relationship manager.” 

“Length of tenure and familiarity with the client’s business matter to businesses. Our business model includes succession planning for each of the Local Bankers, to ensure a high level of continuity. The fact that our bankers are rewarded for customer service rather than the number of deals we believe will also help alleviate issues of high churn.”

CivilisedBank’s business model sets it apart from other challenger banks and fintech companies: its network of Local Bankers will make business lending decisions in their local area. They will be supported by a state-of-the-art system, allowing lending decisions to be made quickly. This will enable businesses to get on with the business of growth. The Local Bankers will be part of the local community and will be able to give advice and support to their business customers.

[1] 2.3 relationship managers in the last 5 years, giving an average of 2.15 years

SMEs experience low levels of satisfaction with relationship bankers – and it could get worse 

Results from a survey of UK SMEs from CivilisedBank, the new UK business bank with a Local Banker network, and Opinium, the award winning strategic insight agency, reveal that despite the importance placed on having a strong relationship with their bank, almost half of UK SMEs (46%) don’t know the availability of their relationship manager or don’t have one at all.

Although the remaining 54% of those surveyed do have a relationship manager, only 18% – less than 1 in 5 – of those with a turnover of £1 million or more state that they are extremely satisfied with their support. Of those with a turnover of more than £500,000, this drops further to 15%, or less than 1 in 7.

The survey also found that the average tenure of a relationship manager is only 2 years[1], highlighting the difficulty around the depth of customer knowledge that can be accrued. As banks cut costs further, questions will be raised as to whether the existing level of service can be maintained or even improved upon by the big banks in the future.

In addition, respondents noted that there are already restrictions as to how involved relationship managers can be: only 43% of those with a relationship manager confirm that their relationship manager is always on call when they need help. There are also questions about their effectiveness: over a quarter (28%) of those with a relationship manager noted that they do not have the authority or ability to make credit decisions locally without having to refer to head office, and a further 22% are unsure whether they have any lending authority.

Philip Acton, Chief Executive Officer, CivilisedBank said:“Our research illustrates that the banking industry should not underestimate the importance of the relationship between a bank and its business customers. However, given how important the personal relationship is, it is striking that only half of SMEs have a relationship manager.” 

“Length of tenure and familiarity with the client’s business matter to businesses. Our business model includes succession planning for each of the Local Bankers, to ensure a high level of continuity. The fact that our bankers are rewarded for customer service rather than the number of deals we believe will also help alleviate issues of high churn.”

CivilisedBank’s business model sets it apart from other challenger banks and fintech companies: its network of Local Bankers will make business lending decisions in their local area. They will be supported by a state-of-the-art system, allowing lending decisions to be made quickly. This will enable businesses to get on with the business of growth. The Local Bankers will be part of the local community and will be able to give advice and support to their business customers.

[1] 2.3 relationship managers in the last 5 years, giving an average of 2.15 years