At a time when more small businesses are looking for alternatives after being the shown the door by their longtime banks, one Arizona retailer recently went public with its frustrations.
By going this route, One Mall Group said it hopes that it will inspire other small and mid-size businesses to consider local options when weighing banking institutions.
Formed in 2006, the Tempe, Ariz.-based online retailer said it covers a range of retail categories, focusing on mattresses and adjustable beds, as well as furniture, décor and bathroom fixtures.
Without naming the bank it switched from, One Mall Group said it has moved its business to the $3 billion Desert Schools Credit Union in Phoenix.
“Recently, our experience with big banks was becoming a daily struggle, being bounced around from department to department with frequent constructed issues. It became evident that they did not value our business or the art of customer service in general,” said Moe Kittaneh, president and chief financial officer of One Mall Group.
In his search of both local and national financial institution options, Kittaneh said what drew him to Desert Schools was its one-on-one service, competitive accounts and “the distinct feeling that my business would be valued.”
“I really liked the idea of using a local institution and being able to meet in person with those handling our accounts. Not only does it help the local economy, it provides us, and thus our customers, a greater level of responsiveness and care,” Kittaneh said.
“The Desert Schools’ merchant account specialist I worked with, Nancy B., was very professional and helpful throughout the entire process, and we look forward to a successful business partnership with the credit union.”
One Mall Group said it decided to announce the change from its bank publicly to inspire other small and mid-size businesses to consider local options when weighing banking institutions.
Mike Foreman, vice president of retail sales and branch operations at Desert Schools, told CUNA’s News Now that Kittaneh was not satisfied with the service he was getting at his bank.
“Kittaneh was not happy with fees related to his account. It seems like the situation here was his business was frustrated with its experiences at the bank, and pleasantly surprised that our credit union could fulfill his needs,” Foreman said.
Frustration among small business owners toward their banks appears to be growing.
According to an Aite Group 2010 report of 283 owners and executives of businesses that generate less than $10 million in annual revenue, many were looking elsewhere for service. Among small businesses that were disappointed with their financial institutions, 31% stated they definitely or probably would switch to a new financial institution.
Thirty-eight percent of the disappointed bank with the big four banks, while 41% bank primarily with regionals. The big four are Bank of America, Citigroup, JPMorgan Chase and Wells Fargo/Wachovia.
The most significant declines in satisfaction were seen in customer ratings of service, online banking application ease-of-use and financial institutions’ ability to understand their specific small business needs, Aite found.
Most respondents said their banks weren’t doing a good job providing tools for managing cash and tracking payables and receivables. The voids could present yet another opportunity for credit unions to take up the slack. Ineffective cross selling and missed opportunities have resulted in most banks maintaining an average of only three products per small business customer year over year, according to Christine Barry, research director at Aite and co-author of the report, “Declining Satisfaction Levels Among Small Business Customers.”
“While the current economic environment is creating new challenges, financial institutions cannot lose sight of the importance of providing high levels of customer service,” Barry said in the report.