The Regulatory Burden Hurts Community Banks, Credit Unions, and Consumers, Too!

By Charles Bruen, President & CEO of First Entertainment Credit Union

Usually if you lock a dozen community bankers and a dozen credit union executives in a wrestling cage the inevitable result is a no-holds-barred tooth-and-nail competitive brawl. However, if you stand in the center of the ring and start cursing the crushing regulatory burden from the Dodd-Frank Wall Street Reform and Consumer Protection Act, they all link arms and harmoniously break out singing Kumbaya. The Dodd-Frank Act, and its meddlesome progeny the Consumer Financial Protection Bureau (CFPB), represent the massive regulatory overreach that both types of depository financial institutions’ leaders love to hate. And that avalanche of regulatory restrictions threatens their very ability to effectively serve their local customers and consumer members.

It has been said on many occasions and in many places – on Capitol Hill, to the regulatory agencies, in the media – that community banks and credit unions did not cause the 2008 financial crisis. However, these smaller financial institutions are nonetheless the ones paying the biggest price in disruption to their daily business and perhaps to their very survival. The cumulative complexities of the new compliance mandates pouring out of the CFPB and other regulators, which over just a few weeks this summer reached 3,000 pages of rules all at once, act like a succession of body-blows driving community banks and credit unions flat onto the operational mat. Some of them are beginning to wonder if they have the strength and stamina to get back up. Continue reading ›

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Jim Miller Joins the J.D. Power Financial Services Team

We are very pleased to announce that Jim Miller has joined our Financial Services practice as Senior Director of Banking. In this role, Jim will focus on developing and delivering high-quality insights, recommendations, and presentations for the banking practice.

Jim brings to the position expertise in both banking and customer experience that make him particularly well-equipped to lead our banking practice.  Most recently, he was President of Prime Performance, Inc., a provider of customer experience research and measurement systems specifically designed for financial institutions.

Prior to joining Prime Performance, Jim was a Senior Vice President at SunTrust, where he managed retail banking analytics, which included branch performance analysis and reporting, branch staff modeling, and sales goal and incentive management. Additionally while at SunTrust, he directed units responsible for branch network planning and customer/marketing information.

We know that you expect more from us than simply pointing our your problems. You expect us to also provide the best practices and industry expertise to actually solve them. Jim and the rest of our team bring unparalleled experience to help you achieve your customer experience objectives in a focused and results-oriented fashion. If you are interested in learning more about our approach from Jim, please feel free to contact Jim directly at James_Miller@jdpa.com.

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How Can Having a World-Class Contact Center Improve Customer Experience AND the Bottom Line?

Drive Improvements Through Better Customer Interactions

Our financial services team would like to invite you to attend a complementary contact center webcast.  In this webcast we’ll explore the unique challenges facing the banking community and discuss opportunities to help you differentiate your brand from the competition.

Specific topics include:

  • Implications of failing to deliver an effective customer interaction through the contact center channel
  • Understanding what’s changing about customers’ needs and expectations within the contact center experience
  • Using cross-industry benchmarks and best-practices to create a differentiated customer experience
  • How you can use J.D. Power contact center data to make process improvements, differentiate your brand and influence selection

Specific take-aways include:

  • Data on the importance of servicing clients effectively
  • The J.D. Power and Associates contact center perspective
  • The top drivers of customer satisfaction with the IVR and CSR- What’s changing and how should you adapt?
  • Tools, tips and tricks to  help you achieve your goals
  • What you can do NOW to improve your customers contact experience

WEBCAST DETAILS

Date:  Wednesday, September 5, 2012

Time:  2:00-3:00 pm EST

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Acquiring and Retaining Affluent Customers

Affluent (1) customers are a key segment for financial institution, as they have greater deposit balances, more investable assets, and higher borrowing dollars. Affluent customers also have more products, on average with their primary bank than do less-affluent customers (3.5 vs. 2.8, respectively). Banks have fully realized the potential of these customers and are actively putting greater focus on not only acquiring but also retaining this key customer segment. However, these customers keep the lowest share of their funds with their primary banks, compared with Emerging Affluent and Mass Market customers. On average, Affluent customers keep just over half of their deposits (58%), 20% of investments and 61% of borrowing accounts with their primary bank.

Not only is there a large opportunity for financial institutions to capture a greater share of wallet among these Affluent customers, but financial institutions may also gain a competitive advantage by providing a superior experience for these valuable customers which will result in greater acquisition and lower defection rates. To fully capitalize on this opportunity, it is important to understand the drivers of defection and reasons Affluent customers select their bank, as well as the differing expectations of these customers and the levers banks can utilize to fully satisfy them.

(1) Affluent is defined as income of $150K or more and investable assets of $250K or more; Mass Market is defined as investable assets of less than $100K and income less than $150K; Emerging Affluent is defined as income of $150K or more and investable assets less than $250K, or, income less than $150K and investable assets of $100K or more.

Attracting Affluent Customers

Why Do They Switch?

Nearly one in 10 Affluent customers (9%) switched financial institutions in the past 12 months—a higher rate than among less affluent customers (6%). Affluent customers most commonly state uncompetitive interest rates (30%) and poor service experience (26%) as factors that influenced their decision to switch banks. The amount of churn among Affluent customers provides a key opportunity for competitor financial institutions to acquire these valuable customers.

What Do They Look For?

According to data in our 2012 Bank Customer Switching and Acquisition Study, Affluent customers who select a new primary bank do so primarily based on good prior service experience (31%)—also the leading purchase trigger among less-affluent customers. However, compared with Mass Market and Emerging Affluent customers, the reasons Affluent customers switch banks are less about convenience (branch hours/locations) and more often about products and pricing.

Retaining Affluent Customers

When attempting to satisfy Affluent customers’ expectations and minimize attrition, it is essential to focus efforts on the areas that will have the greatest impact. The challenge with satisfying Affluent customers is not only that their expectations are higher than other customers, but also that they are not always easily identifiable as Affluent customers, especially when they visit a branch location. This means in certain areas of the customer experience, banks should be providing a superior level of service to all customers. However, when Affluent customers are identified, it is critical for banks to optimize this opportunity by providing a proactive and personal approach to ensure customers in this segment are satisfied.

Personal Interaction

It’s key for financial institutions to focus on providing a superior personal experience for Affluent customers, whether it be at the branch or over the phone. Affluent customers with high satisfaction are more likely to indicate the branch representative called them by name; reviewed account information and recommended additional products; offered additional assistance; and thanked them for their business. These are also key for interactions with the bank’s call center. Continue reading ›

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Two Research Insights Too Big To Miss!

2012 Primary Mortgage Servicer Satisfaction Study

Increasing governmental oversight, the credit crisis, the overall state of the economy, and negative media coverage have created a challenging environment for the mortgage servicing industry. To help mitigate these negative effects, mortgage servicers need to understand and apply key best practices that result in the highest levels of customer satisfaction.

Join us for the 2012 Primary Mortgage Servicer Satisfaction Study webcast during which we will explore the following:

  • How customer’s perceptions of mortgage servicers have changed since 2011
  • How the latest regulations and trends are impacting the mortgage servicing industry
  • Which factors are having the biggest impact on satisfaction of mortgage servicers’ customers

Complementary Webcast Details:

Date:  Thursday, July 26 – 2:00 PM EST

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2012 Credit Card Satisfaction Study Findings

In addition to preliminary findings from the study, we will also present information from the following new sections:

  • Satisfaction with new card application and activation
  • Mobile and social media interactions
  • Expanded diagnostics around online interactions

NEW! Credit Card Website Evaluation Study

Given that online interactions are the single most important factor affecting overall customer satisfaction, we will discuss the following:

  • The interactive surveying approach
  • The comprehensive task set covering the full range of credit card online transactions

NEW! Small Business Credit Card Satisfaction Study

There is evidence that satisfaction rankings of small business card issuers will fall out differently than the traditional consumer rankings. During this webcast, we will:

  • Share results from the 2011 Small Business Banking Satisfaction Study
  • Present a proposal for a new study, the Small Business Credit Card Satisfaction Study, which will help credit card issuers understand the drivers of small business customer satisfaction and in turn improve ROI for this key customer segment.

Complementary Webcast Details

Date:  Tuesday, July 31 – 2:00 PM EST

 

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How Banks Charge Fees Without Jeopardizing Customer Satisfaction

As banks continue to explore ways to manage the sensitivity around charging fees while minimizing the impact associated with charging those fees, it’s important to focus on the following three areas:

1.  Stability

The data from our 2012 U.S. Retail Banking Satisfaction Study shows that fee structure changes not only have a significant impact on customer satisfaction, but they also lead to an increase in problem incidence and intended attrition.  The following are some best practices banks should consider when making changes to fee structures:

  • When changes are necessary, focus on limiting the number of changes customers are forces to accept. For example, making two or three changes to fee structures per year may be more confusing and less satisfying than making multiple changes at one time.
  • When fee changes are necessary, it is critical to communicate the changes well in advance so that customers are not caught by surprise.
  • While communication of fees is mandatory, there are some other ways for financial institutions to help ensure customers are aware of changes—e.g., communicating changes more than once and preferably via multiple channels, such as mailed letter and online notification.
Source:  J.D. Power and Associates 2012 U.S. Banking Satisfaction Study

2.  Communication

The impact of communication on the fee experience goes far beyond simply providing advance notice of any changes to the fee structure. There are other best practices that banks can follow to provide their customers with more information regarding fees or information on other product pricing options available:

Account initiation: Starting with account initiation, it’s vital that representatives perform a detailed needs assessment and identify the products that meets customers’ needs. Performing a detailed needs assessment during account initiation provides a big lift in fee understanding (22 percentage point difference for “completely” identified needs) , while also providing a significant lift in satisfaction.

Online account information: It goes without saying that providing customers with clear and concise access to account information and other pertinent information via the bank’s website is crucial. Clarity of account information and Clarity of information provided on the website provide considerable lifts in Fees satisfaction, while also improving fee understanding by 16 percentage points.

Outbound communication: Proactively contacting customers three or four times per year regarding banking products and services enhances satisfaction and understanding of both fees and product offerings, without creating information overload. Study findings show that satisfaction and understanding both begin to decline when customers receive five or more proactive contacts per year. This also includes performing account reviews to ensure customers have the right products. Empowering branch tellers and call center representatives to proactively review customer accounts and make recommendations for alternative products and pricing options provides lifts in Fees satisfaction and understanding and significantly improves the bank’s Brand Image rating for being Customer driven. Continue reading ›

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Becky DeGeorge Joins the J.D. Power Banking Team

J.D. Power and Associates is pleased to announce that Becky DeGeorge has joined the Financial Services Practice of J.D. Power and Associates as Senior Director, Customer Experience Management.

In this role, Becky will expand our capabilities to help our clients to:

  • Identify and prioritize improvement opportunities leveraging data from all customer touch points including on site observations and interviews, root cause, and business impact analysis;
  • Establish and implement highly targeted improvement initiatives designed to deliver specific business results, such as reduced attrition, improved share of wallet, or increased revenue;
  • Design, implement, and manage customer experience management systems that include comprehensive customer listening posts, training, coaching, scorecards, and incentives; and
  • Evaluate and strengthen client customer experience management infrastructure, to include management oversight, communication, and recognition programs.

Becky brings a wealth of experience in customer satisfaction improvement. Most recently, she established and managed the Customer Experience Office at U.S. Bank, leading the company’s efforts to improve customer satisfaction and loyalty.

Prior to joining U.S. Bank, Becky spent 11 years at Wachovia helping lead a transformation that resulted in the bank ranking highest in customer satisfaction among its large bank peers for seven consecutive years. She also has extensive experience, from Wachovia and other companies, in leading the development and implementation of consistent sales and sales management processes that result in increased sales and revenue.

We cannot be in the business of just pointing out customers’ problems. We need to help them solve them too!   Becky and her team will bring unparalleled expertise to help our clients achieve their objectives in a more focused and robust way.

If you’re interested in scheudling a meeting with Becky, she can be reached directly at rebecca_degeorge@jdpa.com

 

 

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