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 . . . Continue Reading Jim Miller Joins the J.D. Power Financial Services Team
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:
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
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 ›
Facilities and Routine Interactions Offset Decreasing Satisfaction with Fees
Highlights from our 2012 U.S. Retail Banking Satisfaction Study(SM)
- Overall retail banking customer satisfaction has improved by one index point in 2012 to an average of 753 (on a 1,000-point scale) from 2011.
- When looking at banks in aggregate by relative size, satisfaction with big banks is 743, a two-point increase from 2011, while satisfaction with midsized banks is up four points to 781. Regional banks experience a slight dip in overall satisfaction, to 759 from 760 in 2011.
“Big banks continue to lag the other banks in overall satisfaction, but they have made significant improvements in reducing the number of problems customers experience and in problem resolution, specifically resolving problems on first contact,” said Michael Beird, director of banking services at J.D. Power and Associates.
- While consumers are growing increasingly dissatisfied with fees, banks are able to offset it with higher satisfaction in other areas, such as banking facilities, account activities and problem resolution.
- Satisfaction with fees has declined to 609, down significantly from 625 in 2011 and from 656 in 2010.
- Monthly maintenance fees have the most significant negative impact on fees satisfaction this year—more so than in the 2011 and 2010 studies—while fees assessed for ATMs and debit cards have less negative impacts on fees satisfaction.
“The negative reaction to fees reflects customers’ irritation about paying for something they didn’t have to pay for in the past,” said Beird. “It also reflects a lack of their complete understanding about what they’re getting for those fees. Customers understand why they’re being charged for ATM and debit card use, but are not clear on what they’re getting for monthly maintenance fees, which drives the bigger drop in satisfaction with those fees.”
- Customer satisfaction with bank facilities—branch and ATM locations, appearance and hours of operation—has improved this year to 779, compared with 771 in 2011 and 765 in 2010.
- One behavior helping increase satisfaction with the branch is that 76 percent of customers say they are greeted by a bank employee when they enter the bank, an increase from 68 percent in the 2010 study.
- Customer satisfaction with the reliability and ease of using ATM machines has increased to 815 from 795 in 2011.
The study measures satisfaction among banks in 11 regions. Study results by region are: Continue reading ›
The 2012 U.S. Bank Customer Switching and Acquisition Study is based on multiple evaluations from 5,062 customers who shopped for a new banking account or new primary financial institution during the past 12 months. Below are some highlights from the study, as well as links to how the industry experts are reacting to the . . . Continue Reading Highlights from the 2012 U.S Bank Customer Switching & Aquisition Study
A Credit Union National Association (CUNA) surveyed 1,100 Credit unions about the impact of Bank Transfer Day
…AND THE SURVEY SAID.…
Credit unions brought in 40,000 in new members Credit unions added $80 million in new savings account funds Nearly 700,000 new credit union members joined the movement Around 80% of larger credit unions . . . Continue Reading What Was the Outcome of Bank Transfer Day?