I am awaiting The World Wildlife Fund to be on red alert for the recovery of the Loyal Business Customer. The population of the Loyal Business Customer that once banked with the local institution because of personal relationships and formed trust is diminishing in population at an accelerated rate. According to this Aite report, among businesses with more than $1 million in annual revenue, about 1/3 are using non-financial institution providers. More than a third of small businesses state they would change institutions for the right package of services. This attributes to lost potential revenue for financial institutions (FIs). About 2/3 of businesses generating less than $20 million in annual revenue see FI services as a commodity with little differentiation.
If FIs don’t want the Loyal Business Customer to disappear forever, they need to develop a strategy to attract and retain them.