TROY, Mich.–Customer satisfaction with the nation’s banks has surged as more consumers have switched to digital-only banking, according to new research from J.D. Power. Perhaps most interesting–even though 24% of customers say they are worse off financially, overall customer satisfaction still increased.
The research, which did not break credit unions out separately and which surveyed nearly 100,000 people, comes at the same time satisfaction with the nation’s CUs has actually decreased two straight years, as CUToday.info reported here.
According to the J.D. Power 2021 U.S. Retail Banking Satisfaction Study, retail bank efforts to “increase customer communication, introduce customer relief and community support efforts and deliver strong digital banking services have helped them score high marks for customer satisfaction in a very challenging year.”
A Case Study
“If you’re looking for a case study in how to improve engagement and deliver a superior customer experience in the face of massive disruption, look no further than the U.S. retail banking industry’s response to the COVID-19 pandemic,” said Paul McAdam, senior director, banking intelligence at J.D. Power. “The fact that satisfaction has improved most among customers who say they feel worse off financially speaks volumes to the proactive efforts many banks launched to support their customers in a period of heightened financial stress. Moreover, banks’ ability to deliver consistently through digital channels has helped reassure branch-centric holdouts and ease the large-scale transition to digital-only banking.”
Key Findings
According to J.D. Power, some of the key findings in the research include:
- Customer satisfaction improves amid flight to digital: “Prior to the pandemic, digital-only customers accounted for just 30% of the retail bank customer base, which routinely had the lowest levels of customer satisfaction of any channel. This year, 41% of customers are digital-only and satisfaction improves most among customers who have high levels of digital engagement with banking products and customer service.”
- Banks step up efforts to help financially insecure customers: “Nearly one-fourth (24%) of retail bank customers say they are worse off financially than they were last year—up from 14% in the 2020 study—and just half of customers say they are satisfied with their current financial condition,” J.D. Power said. “Despite the financial setbacks, overall customer satisfaction with retail banks improves this year, led by a significant 21-point gain (on a 1,000-point scale) in satisfaction among those who feel worse off financially.”
- Majority of customers believe their bank supported them during pandemic: “Nearly two-thirds (63%) of retail bank customers say their banks completely supported them during the pandemic, which drove an 86% increase in likelihood of reusing that bank; a 60-point increase in Net Promoter Score; and a 48% decrease in problems or complaints,” J.D. Power reported. “Specific bank actions that customers associate with support during the pandemic are waiving charges/fees; supporting the community; offering additional advice/guidance; and providing late payment forgiveness.”
- Big banks continue to close gap: According to J.D. Power, big national banks are on track to surpass regional and midsize banks in overall satisfaction after achieving big gains in customer satisfaction with problem resolution; products and fees; communication and advice; and assisted online service. Midsize banks have historically been the leaders in customer satisfaction, with a 17-point gap in satisfaction vs. big banks as recently as 2018. Today, that gap is just four points, the analysis found.
Highest Ranking Banks
According to J.D. Power, the study measures customer satisfaction with banks in 15 geographic regions. The highest-ranking banks and scores, by region, are as follows:
California: U.S. Bank (818)
Florida: Chase (846)
Illinois: Chase (829)
Lower Midwest Region: BancFirst (871)
Mid-Atlantic Region: Atlantic Union Bank (854)
New England Region: Bangor Savings Bank (861)
North Central Region: Huntington (845)
Northwest Region: Umpqua Bank (830)
New York Tri-State Region: PNC (840)
Pennsylvania: Northwest Bank (834)
South Central Region: Chase (848)
Southeast Region: United Community Bank (884)
Southwest Region: FirstBank (823)
Texas: Frost (861)
Upper Midwest: Associated Bank (823) and Chase (823) in a tie
Six Factors
J.D. Power said the U.S. Retail Banking Satisfaction Study, now in its 16th year, measures satisfaction in six factors (listed in alphabetical order): account opening; communication and advice; channel activities; convenience; problem resolution; and products and fees. Channel activities include seven subfactors (listed in alphabetical order): ATM; assisted online; branch; call center; IVR; mobile; and website.
The study is based on responses from 94,784 retail banking customers of the largest banks in the United States regarding their experiences with their retail bank. It was fielded from April 2020 through February 2021. Big banks are defined as banks with more than $260 billion in domestic deposits; regional banks are those with $55 billion-$259 billion in domestic deposits; and midsize banks are those with less than $55 billion in domestic deposits.