An increased willingness by SMEs to switch banks has made Britain's financial institutions more sympathetic to their needs, a survey has claimed.
Financial institutions have responded to damning reports and increased customer movement to improve their service, according to researchers TNS.
Seventeen per cent of firms claim the quality of service they receive from their bank improved during 2004,
The research also revealed that 70 per cent of SME customers would recommend their bank, up from 67 per cent in 2002. But at the same time, the proportion of customers saying they are very likely to consider leaving their main bank increased by two per cent in 2004 compared with the previous year.
Despite this, the number who actually did switch banks was three per cent, the same as in 2003.
The main reasons for switching banks were given as poor service (32 per cent), and charges (26 per cent).
"Quality of service has now overtaken charges as the main reason for small businessesI switching provider," said Rosemary Bayman, TNS managing consultant.
"The key drivers of customer retention in this market are accuracy and efficiency of service, coupled with a good branch service and a good quality customer contact who really understands the needs of the business.
"The main providers are now getting the basics right, but need to work more on going the extra mile in terms of empathy and flexibility."
The findings suggest that banks may be starting to turn around the low point in customer satisfaction which they experienced during 2002 in the wake of Competition Commission findings which highlighted restricted choice for customers and high charges imposed by banks.
Ms Bayman said: " Customers believe that service levels are improving as banks do more to build customer loyalty and reverse the pattern of poor customer service which has characterised the financial services market for SMEs in the past.
"Certainly, banks can no longer rely on apathy or inertia which has traditionally stopped customers looking elsewhere."