Bank bliss?

We’ve all heard the horror stories of how banks have turned the screws on the small business customers in the last 12 months.

Increased risk premiums flowing through to higher loan rates. New, tougher banking covenants. Failing to pass on RBA interest rate cuts. Turning long-standing customers away for no good reason. Putting pressure on SMEs to shift their deposits if they want to keep their loan. Extreme credit rationing.

We’ve even had Federal Government-sponsored summit where banks were forced to sit down with small business groups and then ordered to play nice.

Given this context, you would have expected that SME satisfaction with the banks would have plunged in the last year.

But according to a new survey from Roy Morgan Research, that simply is not the case. Roy Morgan’s latest survey of SME bank satisfaction show average satisfaction has slipped in the last 12 months to 67.9%.

Yes, that’s lower than satisfaction in the general population (73.2%) and it is lower than last year’s satisfaction level of 68.5%. But it’s hardly like SMEs are screaming in the streets about their mistreatment.

Indeed, a few of the banks actually posted increased satisfaction results, with Westpac up 2.8% and Commonwealth Bank up an impressive 4.8%. On the flipside, NAB lost 5.8% and ANZ slipped 1.9%.

So what’s going on here? Have SMEs really shrugged off their treatment at the hands of the banks (remember, more than two thirds have had their banking arrangement reviewed) and patched up these relationships?

Get a group of entrepreneurs in the room and I’d suspect the answer is a loud ‘No’. In fact, having spoken with some very annoyed business owners in the last few months, I’m tipping you’d have a hard time stopping the stream of bile aimed at the banks.

What I think we are seeing in this survey is an air of resignation. SMEs don’t really have much choice but to be satisfied with their bank – at the moment, they will find it extraordinarily hard to shift from one big bank to another, and it’s certainly not like there is an army of smaller competitors waiting in the wings.

Here’s a message for the banks. Your SME customers might be satisfied, but many are far from happy. When conditions and competition improve, they will quickly leave if the screw turning we’ve seen this year continues.