A damning new survey has put hard numbers on what many small business owners have long sensed: their banks are service utilities, not growth allies. According to Grasshopper Bank's Beyond Small survey, just 7% of small and medium-sized business owners regard their primary bank as a genuine strategic partner. Meanwhile, 65% describe their banking relationship in purely transactional terms — a utility, comparable to an electricity provider or internet service, rather than a business-building resource. On a ten-point confidence scale measuring banks' capacity to drive business growth, the average score lands at a tepid 5 out of 10. These figures represent a significant indictment of an industry that has spent years, and considerable marketing budgets, positioning itself as the trusted advisor to the entrepreneurial class.
The Aspiration Versus the Reality
The "trusted advisor" narrative has been a cornerstone of commercial and retail banking strategy for at least a decade. In annual reports, branch redesigns, and relationship-manager training programs, banks have consistently framed themselves as partners invested in the long-term health of the businesses they serve. The language has been consistent: deep relationships, tailored guidance, financial expertise placed at the service of growth-oriented entrepreneurs. The Grasshopper Bank data suggests that narrative has failed, at least from the perspective of the people it was designed to persuade. When fewer than one in ten small business owners internalizes that message, the disconnect between institutional aspiration and customer perception is not marginal — it is structural.
The utility characterization embraced by 65% of respondents is particularly telling. A utility is a necessary, largely undifferentiated service: you require it, you pay for it, you rarely think about it until something goes wrong. For banks, being perceived as a utility means they have effectively commoditized themselves in the eyes of their most commercially active retail customers. That is a precarious position in an era when fintech challengers — neobanks, embedded finance platforms, and digital-first lenders — are actively competing for the same segment by bundling financial tools with operational software, invoicing, cash-flow forecasting, and payroll management.
Why the Message Is Not Connecting
The survey data points to a credibility gap rather than simply a communication gap. Banks have not necessarily failed to deliver their trusted-advisor message; they have failed to back it with experiences that small business owners find meaningful. For an entrepreneur running a ten-person firm, the definition of a strategic partner involves anticipatory advice, rapid credit decisioning, transparent fee structures, and tools that integrate with the day-to-day reality of running operations. What many banks continue to offer is a combination of legacy technology, relationship managers stretched across too many accounts, and products designed for a customer segment that is neither retail consumer nor large corporate — a middle ground that has historically received inadequate attention and investment.
The confidence score of 5 out of 10 is equally instructive. It is not a score of zero, which would indicate outright hostility or complete disengagement. It signals ambivalence — small business owners neither trust banks to propel their growth nor fully distrust them. They are open to being convinced but have not yet seen the evidence. That ambivalence represents an opportunity window, but it is one that is narrowing as alternative providers accumulate data, develop more sophisticated underwriting models, and refine their small-business value propositions.
The Competitive Stakes
The timing of this survey matters. The small and medium-sized business segment represents a substantial share of economic activity across most developed markets and is among the most fiercely contested in financial services. Fintech platforms have made considerable inroads by addressing the pain points that traditional banks have historically deprioritized: speed of account opening, quality of digital interfaces, access to working capital, and the integration of financial data with business management tools. If only 7% of small business owners consider their bank a true partner, it means that 93% are potentially receptive to a compelling alternative pitch — a market share vulnerability that should concern every incumbent institution's strategy team.
Banks that take the Beyond Small findings seriously will need to move beyond messaging and invest in substantive product redesign for the small business segment. That means rethinking credit accessibility, investing in data-driven advisory tools, reducing friction in everyday transactions, and — critically — training relationship staff to offer insights that are actually calibrated to a small business owner's specific industry, growth stage, and cash-flow profile. Aspirational language about partnership has run ahead of the operational delivery required to make it credible.
What This Means for the Sector
The Grasshopper Bank survey functions as a market diagnostic as much as a brand study. The 7% figure is a baseline — a measure of how far banks must travel to close the trust gap with a segment they claim to prioritize. With confidence in banks as growth drivers sitting at the midpoint of a ten-point scale, the window for incumbents to reclaim strategic relevance with small business owners remains open, but it demands more than a refined marketing narrative. It demands a fundamentally different operating model for SMB engagement: one where advice is data-backed, products are genuinely tailored, and the relationship feels less like a branch visit and more like a boardroom conversation. Until that gap closes, the trusted-advisor pitch will continue to ring hollow for the majority of the entrepreneurs banks most need to retain.
Written by the editorial team — independent journalism powered by Codego Press.
