The winners of the 2019 Greenwich Excellence and Best Brand Awards in U.S. Middle Market Banking all have one thing in common: they deliver traditional banker advisory values along with the convenience of intuitive digital channels.
Regulations passed in the wake of the Global Financial Crisis required banks to share a host of new compliance requirements with their commercial clients. These rules accumulated over time and triggered increasing and frequently duplicative documentation requests. Recognizing the friction these new requirements were creating, banks began seeking ways to shield companies from requirements headaches. “Today, companies are judging their banks according to very simple metrics: Help me grow my business and make routine tasks painless,” says Greenwich Associates Managing Director Chris McDonnell.
The very best banks—including many of the Greenwich Award winners—have actually taken it a step farther, and have rolled out tools and processes that actually speed up key functions like electronic payments and are increasingly adding data values as part of cash management relationships.
Manual vs. Digital Solutions
Banks have addressed this challenge with integrated human/digital strategies. Big banks have been driving internal innovations as well as meaningful investments in technology. Simply pre-populating digital documents has reduced frustrations associated with onboarding and other common “pain points” for companies. Smaller banks are forced to get creative due to more limited budgets and are levering their traditional “high touch” service advantage to limit clients’ exposure to documentation demands.
Each of the 2019 Greenwich Excellence and Best Brand Award winners in Middle Market Banking is delivering a unique blend of tech and high-touch strategy. Winners demonstrate an understanding and commitment to fielding teams of talented and proactive relationship managers and customer service professionals that are consistently meeting the needs of middle market clients in terms of “ease of doing business.” The top winners for 2019 are Frost Bank, Hancock Whitney and Pinnacle Financial, each winning 14 Greenwich Excellence and Best Brand Awards.
However, it’s unclear how long regional banks will be able to maintain their current advantage. The considerable technology budgets of the national and global banks are enabling digital innovations that are revolutionizing how companies interact with banks. Traditionally, the banker intensive service models of regional and smaller banks have given these banks a significant lead over their bigger rivals in terms of ease of use, customer satisfaction and loyalty. In the past several years, however, the gap has been narrowing—largely because of the big banks’ digital capabilities. At the same time, leading banks have been investing in middle- and back-office technologies that are simultaneously making them operate more efficiently.
“The fact that digital platforms are increasingly the interaction channel of choice for executives will dictate strategy, investment and differentiated client experiences over the next five to 10 years,” says Chris McDonnell.
Can Regional Banks Fend Off Fast-Improving Bigger Rivals?
However, the industry’s increasing reliance on technology does not necessarily mean that the future belongs to the biggest banks with the biggest IT budgets. There are excellent digital tools available across a range of products, and it’s entirely possible that regional banks will be able to assemble capabilities that meet the needs of their clients. Winners will maintain their service advantage by marrying digital capabilities with their traditional high-touch model. To do so, they will have to contend with national banks’ scale and maintain the flexibility to partner with “Fintech” providers who are driving innovation in less restrictive settings.
“Will middle market businesses demand the incremental advantages of a global bank’s platform, and will smaller banks be able to identify and fill the necessary gaps to remain viable?” asks Chris McDonnell. “Only time will tell.”
2019 Greenwich Excellence and Brand Award Winners in U.S. Middle Market Banking
Greenwich Associates evaluated the middle market banking platforms of more than 600 banks in the U.S. in 2019. Of these, only 33 had the distinctive quality required to win a Greenwich Excellence Award and only 16 to win a Greenwich Best Brand Award. These awards are based on interviews with over 13,000 middle market clients with sales of $10–500 million across the country.