Impact of Fees on Virtual-Only Banking Customers

Driven by the adoption of mobile banking and increased functionality of the website and ATM channels, a new segment of ‘virtual’ retail banking customers is emerging (those who only interact via digital channels). These customers have unique preferences and expectations that can present challenges to banks attempting to improve satisfaction and loyalty metrics. Data from the first three fielding waves of the 2015 J.D. Power U.S. Retail Banking Satisfaction Study can help banks understand the different segments of retail banking customers, and identify how the customer experience may differ from one segment to the next.

For example, study data finds that the negative impact of fees is considerably greater among virtual-only customers (compared to customers who only transact via the branch and ATM). Furthermore, virtual-only customers are more likely to incur certain fee charges and are less likely to indicate that their minimum-balance requirement is reasonable.

virtual only customers fe

Based on these findings, banks can develop strategies designed to improve the fee experience amongst their virtual customer base:

  • Clearly illustrate the ‘value’ that customers are receiving in exchange for the fees they pay. For example, in exchange for a given fee, virtual-only customers are receiving a highly functional website and mobile app that allow them transact with the bank in their preferred manner.
  • Invest resources in improving aspects of the customer experience that may improve the ‘value proposition’ perceived by virtual-only customers.
  • Focus on fee and product education, which may be especially difficult for virtual-only customers who may not visit a branch to receive a face-to-face explanation.
  • Consider proactive account reviews of virtual-only customers to ensure that customers are aligned to the correct account. If a better option exists, proactively contact the customer with an alternative product that will benefit them.

The complete 2015 J.D. Power U.S. Retail Banking Satisfaction Study (with all four waves of data) publishes on April 28th.

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