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BirdsEye View

 We are experiencing a decline in C&I loan demand in many regions of the country, and an increase in loan types we are more cautious about than usual (CRE, ADC etc.). Banks are refocusing on deposits, but this doesn’t mean that loans are not front-and-center as we continue to seek profitable growth.

It bears reminding during these times what loan and deposit customers are looking for. As has been the case since I started looking at this topic three decades ago, price is not in the top three considerations. This doesn’t conform with the prevailing common wisdom, but has been the case through the Greenwich Research surveys in various markets since inception.

Below are the key drivers of satisfaction for borrowers $1-10 million in sales AND borrowers $10-500 million in sales. They are the same. Ditto for noon-borrowing customers in both size categories. While the order of the top five drivers is somewhat different across these four groups, the content is the same:

• Values long-term relationships
• Is a bank I can trust
• Ease of doing business
• Relationship manager (#4 driver in all four groups)

Credit/customer service professional (evenly split between borrowers, who find credit more important and put it in the fifth position, and non-borrowers, who put the customer service professional in the fifth position)

These key satisfaction drivers bode well for supercommunity banks who can effectively execute on all drivers.

As you commence your 2024 planking cycle, it is particularly important to your commercial and business banking success to remind your teams of these customer preferences. You are especially well-positioned to deliver on these satisfaction drivers for current and prospective customers. Deliver these values and they will stay with you for the long haul (so long as your rates are reasonably competitive).