TROY, Mich. — U.S. retail bank customers are “losing faith in their bank, and customer attrition is a concern,” according to J.D. Power’s new 2024 U.S. Retail Banking Satisfaction Study.
The study found consumer trust in retail banks has declined significantly during the past two years, with “unexpected fees, poor customer service and bad press being key threats to a customer’s trust.” And in a development that will be of interest to credit unions, J.D. Power reported that this year, 13% of bank customers say they are likely to switch institutions in the next 12 months.
The 2024 study is based on responses from 105,355 retail customers of the largest banks in the United States regarding their experiences with their retail banking institution. It was fielded from January 2023 through January 2024.
Interaction Every Three Days
“Retail bank customers interact with their bank every three days, on average, across a combination of digital, phone and in-branch channels, and the tenor of those interactions has a massive influence on customer satisfaction and overall levels of trust,” said Jennifer White, senior director of banking and payments intelligence at J.D. Power. “Despite widespread efforts to improve the customer experience, many banks are missing the mark on critical customer touch points by treating customers like numbers. To retain deposits and build customer loyalty and trust, banks need to do a better job of focusing on fundamental interactions, proactively solving problems and delivering personalized advice.”
Key Findings
According to J.D. Power, some of the key findings in the 2024 study include:
- Bank customer satisfaction flat while trust declines. “Overall customer satisfaction held steady during the past year, declining a single point (on a 1,000-point scale), but trust is down significantly for a second consecutive year,” J.D. Power said. “The top contributors to customers losing trust in their financial institution are unexpected fees; delayed availability of deposited funds; news reports about bad banking practices; errors blamed on customer actions; and closed branches and reduced hours.”
- Customer loyalty at risk. “This year, 8% of retail bank customers say they have changed their primary bank, up from 5% in 2018. What’s more, 13% of retail bank customers say they ‘probably will’ or ‘definitely will’ switch banks in the next 12 months. Fewer than half (46%) of bank customers say they are certain they will remain with their current bank in the next year.”
- Account fees and poor customer experiences are drag on loyalty. “Among those customers who are likely to switch banks in the next 12 months, 29% say it is because they were charged either too many or high fees for products and services and 26% say they had a poor service experience,” J.D. Power said.
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Back to basics of customer engagement.
“Overall branch customer satisfaction scores are 123 points higher than average (830 vs. 707, respectively) when banks deliver on absolute basics of customer service, such as welcoming customers to the branch; delivering fast service; thanking customers for their business; and calling customers by name. Every contact and every interaction influences customers’ experiences and their satisfaction.”
About the Study
The study measures customer satisfaction with retail banks in 15 geographic regions.
J.D. Power said the U.S. Retail Banking Satisfaction Study, now in its 19th year, measures satisfaction across seven dimensions (in order of importance): trust; people; account offerings; allowing customers to bank how and when they want; saving time and money; digital channels; and resolving problems or complaints.
For more info, go here.
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