Credit Card Customer Website Expectations

The proportion of credit card customers who use online channels to perform basic tasks continues to increase, with those who use a smartphone or tablet preferring different experiences from those who use a computer, according to our J.D. Power and Associates 2012 Credit Card Website Evaluation StudySM (CCWES) released today.

The inaugural study examines the . . . Continue Reading Credit Card Customer Website Expectations

Peering Into the Future

A Guest post By

Online banking carries with it the same question that accompanies every aspect of human activity moving online: Is it simply a more convenient way to do what we’ve always done, or is something new, particularly in the sense that we can do more, and therefore will do more?

There’s obviously no simple answer to this—the very act implies a level of customization that rules out any all-purpose conclusion. But if we still don’t know everything, what we do know now that we didn’t know even a couple of years ago?

A recent report from Javelin Strategy & Research has some answers, and they’re not particularly pleasant. Here’s the gist: Too many financial institutions still view online banking as the completion of a circle—consumers and (and maybe businesses as well conducting transactions, only doing it faster and more easily than by going to the bank. Javelin emphasizes that this “approach to online banking and bill pay has reached saturation because it is outmoded and unappealing in an era of customer-controlled interactive finance.” And that’s not all. Instead of new, technology-driven offerings drawing more business, Javelin theorizes, it might be even be a handicap: “The banking industry’s stale approach to online banking and bill pay leaves FIs particularly vulnerable to losing the 11% of consumers who are likely to switch primary FIs this year.”

The fundamental problem is the role of the bank in the equation—is it now simply a facilitator, the same way a basic piece of technology might be, or does it have more to offer? Continue reading ›

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Understanding Actual vs. Intended Customer Attrition

Did you know that customers who INTEND to switch primary financial institutions have the greatest value?

Bank customer attrition rates, both actual and intended, continue to increase. According to data from our J.D. Power and Associates 2012 US Retail Banking Satisfaction Study, intended attrition has increased significantly to 12.9% from 10.7% in 2011 after having decreased from 2010 to 2011. The actual attrition rate has steadily increased since 2010, reaching 9.6%(1) this year.

By bank size, Midsize Banks have the highest attrition rate (11.3%), followed by Regional Banks (10.3%); Big Banks (10.0%); and Small Banks and Credit Unions (7.4%).(2) While most customers who switch leave one Big Bank for another Big Bank (29%), 19% of customers switch from a Big Bank to a Small Bank or Credit Union, demonstrating customers’ willingness to trade the convenience of a large banking network for the personal service of a local small banking network or credit union.

Notes: Actual AttritionRate is based on the 2012 Financial Services Screener

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Credit Card Customers Happier With Fewer Changes

As appeared in The Financial Brand on September 11, 2012.  The Financial Brand, written and published by Jeffry Pilcher, is an online publication focusing on issues and advice that affect bank and credit union brands.


Customers are happier now that credit card companies are making less changes to the ways their programs are . . . Continue Reading Credit Card Customers Happier With Fewer Changes

Satisfaction With Social Media Interaction

Social media, a non-traditional method of customer interaction is clearly becoming increasingly important for banks to understand.

It’s no longer just a vehicle for customers to vent about poor experiences, praise their bank for exceeding expectations, or read about other customers’ positive or negative experiences—it has now become a legitimate service channel!

Social media sites . . . Continue Reading Satisfaction With Social Media Interaction

2012 Credit Card Website Evaluation Webcast

Do you know about our inaugural J.D. Power and Associates 2012 Credit Card Website Evaluation Study?  We’ll publish it on October 4th, and we’re excited to share some of the research details with you!

The websites of credit card issuers serve as a major portal for customers to service their accounts and obtain information . . . Continue Reading 2012 Credit Card Website Evaluation Webcast

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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Are Rewards Programs Rewarding?

Rewards is a primary driver of switching and selection in the credit card industry. This is especially true among Transactors,(1) who cite rewards as the primary reason for selecting their primary card, as well as the primary reason for leaving their previous credit card issuer. Notably, rewards has also become an important driver of . . . Continue Reading Are Rewards Programs Rewarding?

Future Trends in Credit Card Customer Satisfaction

According to our 2012 U.S. Credit Card Satisfaction Study released late last week, the competitive environment is stabilizing and credit card issuers are making substantial strides in improving areas that were previously problematic—particularly communication and problem resolution.  So, what comes next? How are customer expectations changing, and what are the implications for issuers? Where should issuers focus their efforts in the future?

1.  Digital channels and self-service

The shift to online use and away from phone and mail continues. Customers are performing more routine activities online, such as reward-related activities, and are contacting call centers less often with questions or requests and are beginning to seek answers via self-serve channels, such as online. In fact, data from our 2012 Credit Card Satisfaction Study indicates that customers are attempting to resolve problems on their own and are moving away from contacting the call center for simple problems, but contacting the call center to deal with more complex issues.


2012 J.D. Power and Associates U.S. Credit Card Custom Satisfaction Study©.  The McGraw-Hill Companies, Inc. All Rights Reserved.

In addition, 7% of customers indicate using a mobile device to interact with their credit card issuer, and 5% have used social media for service transactions.  Another emerging trend related to the increased use of digital channels for routine transactions and greater reliance on self-service tools is that the issues about which customers contact the call center are becoming increasingly complex. This has important implications for the role of the call center and the requirements for call center representatives.

THE POINT:  Not only will issuers need to continue to commit resources to online as the workhorse for routine transactions, but they will also need to simultaneously invest in and develop these emerging online channels since customers prefer this method of communication above all others.  Knowledgeable employees that are able handle complex problems are a necessity.

2.  Rewards and Communication

An examination of recent success in the market, as defined by the highest-performing issuers, American Express and Discover Card, and the most improved issuers, Chase and Barclaycard, shows that two drivers of advantage in the past—rewards programs and customer communications—will continue to provide an expanding competitive edge in the future. 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 . . . Continue Reading Jim Miller Joins the J.D. Power Financial Services Team