Phoenix-Hecht Quality Index™

The Phoenix-Hecht Quality Index™ is a statistically valid comparison of customer perceptions about bank performance for cash management services. Individual bank Quality Index™ scores are available directly from participating institutions.

The purpose of the Quality Index™ is to provide a simple means of comparing individual bank performance ratings from the universe of private and public companies with annual sales above $40 million. Phoenix-Hecht has published a Quality Index™ since 1992 as part of the larger research project, The Cash Management Monitor™.

There is a Quality Index™ for each of three different classes of corporations, based on the annual sales size of the corporate customer.

• Middle Market ($40-$100 Million)
• Upper-Middle Market ($100-$500 Million)
• Large Corporate (Over $500 Million)

Grading Methodology

The Quality Index™ has five letter grade ratings, with the highest being an A+ and the lowest a D. The specific numeric rating required to achieve each letter grade was set in 1992, allowing for consistent interpretation that an A in one year requires the same basic score as an A in the following survey.

Customers of each bank (survey respondents) were asked to provide numerical ratings of one to five, with five being high, for only the services utilized. For each question and market segment, a mean rating was computed for each bank. A single mean rating for each question was then computed using all banks with more than twenty responses. The mean ratings for all questions were then used to compute survey-wide means and standard deviations for each market segment.

To calculate grades, the mean rating for the question/market segment was compared to the overall mean rating for the companies of that sales size market segment. The difference between the two was stated in standard deviations from the overall mean. Next, the mean rating for each bank for the question/market segment was compared to the mean for all banks from the same question/market segment. The difference between the two was stated in standard deviations from the question/market segment mean. The two standard deviation differences were weighted and added together. Two-thirds of the weight was based on the position within the specific measure and one-third was based on the overall score.

Achieving a specific grade is somewhat easier in certain products than in others. For example, wire transfer, a highly automated service, consistently receives higher grades than do other services. The calculation of grades is based not only on how well a bank does relative to its peers in a category, but also on how a category scores overall in the survey. These two factors are weighted equally in the grade determination process.

Grading Categories

The product evaluations measure the respondent's perception of processing speed, accuracy and timeliness for a core group of cash management products.

• Wholesale Lockbox
  • Speed of processing
  • Accuracy of processing and reporting
  • Overall product and features
• Wire Transfer
  • Timeliness of initiation and processing
  • Accuracy and reliability
  • Overall product and features
• Balance Reporting
  • Timeliness of initiation and reporting
  • Accuracy and reliability
  • Overall product and features
• Controlled Disbursement
  • Timeliness of notification
  • Consistency of notification
  • Accuracy of notification
  • Overall product and features
• ACH
  • Speed of error correction
  • Accuracy of processing and reporting
  • Overall product and features
• Depository Services
  • Accuracy of notification
• Internet Services

The bank perception evaluations measure the respondent's perception of the bank's capabilities.

• Innovation
• Service customization
• Product specialists
• Customer service
• Customer calling program
• Prospect calling program

The relationship management evaluations examine many of the human aspects found in the selling process. Relationship manager is defined as the contact from whom the customer purchases cash management services

• Calling officer knowledge
• Anticipates service needs on new services
• Informative regarding new services
• Prompt call follow-up
• Problem resolution
• Accessible when needed
• Understands client's business and industry
• Understands international cash management

Survey Methodology

In the fall of each year Phoenix-Hecht conducts a portion its corporate survey of senior financial executives responsible for managing the bank relationships for cash management services. The survey targets public and private U.S. parent corporations with sales of $40 million and greater. Major domestic subsidiaries of international corporations were also included. A significant number of companies participate in the survey. Typically, the sample universe results in an error rate, attributable to sampling and random effects, of plus or minus 2.4%, with 95% confidence. The middle market segment is interviewed in even numbered years while the upper-middle market and large corporate segments are surveyed in odd numbered years.

Banks Surveyed

ABN AMRO / LaSalle
Bank of America
Bank of New York Mellon
BMO Capital Markets (Harris Bank)
Citibank
Citizens Bank (RBS)
Comerica Bank
Commerce Bancshares - K.C.
Commerce Bank - NJ
Compass Bank
Deutsche Bank
Fifth Third Bank
First Horizon (First Tennessee)
HSBC Bank USA
Huntington National Bank
JPMorgan Chase
KeyBank
Marshall & Ilsley
M&T Bank
National City Bank
Northern Trust Company
PNC Bank
Regions Bank (AmSouth)
Sovereign Bank
SunTrust
UMB
Union Bank of California
US Bank
Wachovia Bank
Wells Fargo Bank

Note: Individual bank results are released at the sole discretion of the surveyed bank.