In May 2017, EMI published a blog that discusses how banks use surveys to build small business engagement. In that blog we reported that many leading banks publish recurring surveys that track general business optimism as well as key challenges and opportunities. In addition, banks also carry surveys that cover specific topics on a one-off basis. The following table looks at the topics covered over the past six months:
The banks cover these topics of interest to achieve a number of objectives, including:
- Raising general awareness of the bank and affinity among small businesses
- Positioning the bank as a small business banking thought leader
- Communicating their understanding of the changing issues impacting small businesses
- Highlighting their areas of strength
- Differentiating the bank from its competitors
In fact, the desire for differentiation is leading banks to conduct surveys on specific small business sub-segments or on specific product areas. Recent standalone surveys of this type include:
- U.S. Bank surveys of Asian-American small business owners (October 2017) and Hispanic small business owners (October 2017)
- Surveys by both Bank of America (September 2017) and American Express (November 2017) on women-owned businesses
- Bank of America Small Business Payments Spotlight (October 2017)
- American Express Small Business Saturday Consumer Insights Survey (November 2017)
The proliferation of small business surveys that cover specific topics of interest indicate that they are effective tools in helping banks build awareness and engagement with their small business clients and prospects.
In a March 2017 blog post, EMI highlighted growth in credit card outstandings across the credit spectrum for leading credit card issuers. Our recent analysis of 3Q17 10Q SEC filings for these companies shows that this trend is continuing.
The top three issuers—Bank of America, Chase, and Citigroup—reported growth across all FICO Score segments, with strongest growth coming in the lowest segment. In the aftermath of the Financial Crisis, issuers pulled back on lending to low-prime and sub-prime consumers. With the return to steady economic growth in recent years—and with issuers now believing that they have more robust underwriting and pricing systems—issuers are now refocusing on consumers in lower FICO Score categories.
Assets at both Capital One and Discover skew heavily towards credit card loans. Discover generated 9% y/y rise in credit card outstandings, led by 16% rise in loans to consumers with a <600 FICO Score. Capital One bucked the overall trend, with lower growth for its <660 FICO Score segment. However, it should be taken into account that this segment accounts for 35% of its total credit card outstandings (vs. 15% at Chase, 16% at Citi, and 19% at Discover), so it has less scope for strong growth.
The leading regional bank card issuers—who focus on cross-selling credit cards to existing bank clients—reported a similar pattern. SunTrust has continued its very strong growth trajectory, with overall growth of 16% led by the <620 category. Regions followed a similar pattern, with 7% overall growth in outstandings driven by a 35% rise in the subprime (<620) segment. PNC had strong growth across the credit spectrum. Fifth Third had strong growth in the <660 segment, but from a very low base. The y/y decline in outstandings in its 720+ category resulted in Fifth Third overall credit card outstandings remaining unchanged. Wells Fargo’s overall growth rate (+4% y/y) has slowed considerably in recent quarters. It generated steady growth across most categories, with the exception of the 600-680 FICO range.
In recent weeks, a range of leading national and regional banks have carried out small business surveys, many of which were timed to coincide with 2017 National Small Business Week (April 30-May 6). These include new surveys from Citizens Bank (Small Business Pulse) and Fifth Third Bank.
These surveys are designed to:
- Generate brand awareness among small business owners
- Underline the bank’s commitment to this market
- Position the bank as a thought leader in the small business space
- Promote the bank’s small business solutions
The following are six approaches that banks are using to leverage small business surveys to drive engagement with their small business clients and prospects:
- Establish a branded index. Many banks measure small business optimism via an index. This enables them to both track this metric over time, as well as generate general business press attention. Citizens recently-published survey includes the Citizens Business Pulse Index, which is its measure of the small business climate. Other indexes include the Wells Fargo/Gallup Small Business Index and the Capital One Small Business Growth Index.
- Create a recurring survey. Many of the leading banks now conduct surveys on a quarterly, biannual or annual basis, which enables them to track small business metrics over time. Capital One has been tracking a Small Business Confidence Score consistently since 2008.
- Survey topics of interest. Most surveys focus on small business optimism and outlook. However, surveys also look to differentiate by covering other issues that should be of interest to small businesses. The U.S. Bank Small Business Annual Survey studies small business owners’ personal satisfaction as well as the desired attributes they want from their business bank.
- Use infographics to summarize survey findings. Presenting key findings from the survey (which will typically include a series of statistics) in a visually-appealing format allows readers to quick grasp important points the bank wants to make. Wells Fargo published a lengthy survey report, but it also created a one-page infographic that summarizes key takeaways.
- Version the survey for target markets. Bank of America creates versions of its Business Advantage Small Business Owner Report for 10 target markets (Atlanta; Boston; Chicago; Dallas/Fort Worth; Houston; Los Angeles; New York; Miami; San Francisco; and Washington, D.C.). Similarly, PNC publishes its Spring Economic Outlook Survey findings for 10 regional markets.
- Position the bank (subtly) as a small business solutions provider. Fifth Third’s recent small business survey included findings on funding growth, while also positioning the bank as “committed to the development of small businesses throughout the Bank’s footprint.“