Satisfaction with Retail Banking at an All-Time High, but Focus on Customer Experience must Continue

Released this week, J.D. Power’s annual measurement of the retail banking industry finds that customer satisfaction is at its highest level since the study originated in 2005. As displayed in the chart below, industry satisfaction has reached 790 (on a 1,000-point scale), representing a significant increase from the 785 reported in April 2014.

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Analysis of study data identifies different drivers of improved satisfaction across the different bank size segments. For example, Regional and Midsize Banks saw large increases in satisfaction with Problem Resolution, while Big Banks saw their largest increases with regards to Fees and Call Center Interaction.

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Despite the positive news, banks must maintain their focus on the customer experience. On one hand, several opportunities for improvement remain, such as:

  • Fee-related problems remain prevalent so continued focus on transparent product and pricing education is necessary
  • ‘Engagement’ metrics (i.e. account initiation) that can help deepen relationships and obtain additional share-of-wallet are inconsistent across brands and certain customer segments
  • Keeping up with constantly evolving consumer preferences/behaviors/demands, such as online account initiation and online problem resolution, are creating challenges for many banks

In addition to benchmarking brand-level performance on key aspects of the customer experience, the study also provides valuable insights into overall industry topics including, but not limited to:

  • The emergence of new customer segments which are driven by transactional behavior (i.e. ‘virtual-only customers’)
  • Capitalizing on the potential of customer growth segments such as Gen Y and Gen Z
  • Evolution of the branch experience

Finally, the airline industry provides an interesting parallel to the current state of customer satisfaction within the banking industry. Data from the 2014 J.D. Power North American Airline Study finds that customer satisfaction with airlines is also at its highest level since 2006, however, many people who have traveled recently could quickly identify a few aspects of their experience that could be improved. With this in-mind, banks should acknowledge the positive strides made over the past several years with regards to customer satisfaction, but understand that many opportunities for further improvement remain which can have a significant impact on both short-term and long-term financial growth.

 

Note: Big Banks are defined as those with $180 billion or more in total deposits; Regional Banks are defined as those with $33 billion-$180 billion in total deposits; Midsize Banks are defined as those with $2 billion-$33 billion in total deposits.

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