Results of a newly-released retail banking satisfaction survey are reflecting the realities of customer needs driving digital transformation. The J.D. Power 2022 U.S. Retail Banking Satisfaction Study report, released on April 7, identified critical factors for customers which serve as a clarion call for bank marketing teams facing post-pandemic realities.
The company’s headline identifies the driving forces behind the financial services industry’s fast-paced focus on digital transformation, noting, “J.D. Power Finds U.S. Retail Banks Struggle to Differentiate, Deliver Meaningful Customer Experience as Economy Sours: Mass Shift to Digital Creates Challenges for Brands Looking to Drive Superior Customer Engagement.”
Here is a snapshot summary of the Survey:
The twin forces of digital transformation and rising inflation have created a new set of customer engagement challenges for the nation’s retail banks, according to the summary of the Survey which was released in its entirety on April 7, 2022. The company’s synopsis also reported that “Most banks are missing the mark when it comes to making their customers feel supported as increasing numbers of U.S. consumers indicate an increase in their financial stress. Moreover, banks have struggled to deliver on customer expectations for personalization as nearly half of customers have now moved to primarily digital-centric banking relationships.”
The study was based on responses from 101,587 retail banking customers of the largest banks in the United States regarding their experiences with their retail bank. It was fielded from April 2021 through January 2022.
A news report on the survey published by ABA Banking Journal’s Newbytes, noted that overall satisfaction levels rose 155 points (on a 1,000 point scale) among customers who say their bank provides that kind of support. Additionally, 63% of customers who feel supported by their bank said that they “definitely will not switch banks,” while 78% said they would continue to use their bank. However, the survey showed that banks have room for improvement in this area, as the survey also found that only 44% of banks were delivering on successfully providing that support.
“A customer’s definition of what support from their retail bank looks like is changing rapidly as we enter a new economic cycle and move further along the digital adoption curve,” said Jennifer White, senior consultant of banking intelligence at J.D. Power. “It’s no longer predominately about being fast, efficient or convenient. The preeminent performance metric with the biggest influence on customer satisfaction is ‘supporting the customer during challenging times,’ and that means customers are expecting a personalized mix of financial advice, hands-on help with problem resolution and guidance on how to grow their money.”
Following are key findings of the 2022 U.S. Retail Banking Satisfaction Study, according to J.D. Power:
- Bank customers seek support in tough economic times: Overall customer satisfaction with retail banks rises 155 points (on a 1,000-point scale) when customers cite that their bank supports them during challenging economic times. Similarly, 63% of customers say they definitely will not switch banks and 78% say they definitely will reuse their bank when it delivers this support. However, despite its huge effect on customer satisfaction, only 44% of banks are delivering on this metric.
- Customers least satisfied with their bank’s ability to help save time or money: While banks perform particularly well on traditional customer engagement metrics such as people, digital channels and overall trust, satisfaction scores are lowest for helping retail bank customers save time or money, which has become a key priority for them.
- Efforts to reduce fees go largely unnoticed: Although customers who pay bank fees (e.g., overdraft or low balance fees) are three times more likely to consider switching banks, only 61% either do not know or are unsure whether their bank has made any changes to their overdraft fee policy. Notably, many big banks have introduced fee relief plans this year.
- Alerts and fee avoidance advice are important personalization tools: When asked how they would like their bank to personalize their banking experience, 46% of customers say they want help in avoiding fees and 37% say they want to receive account alerts.
The U.S. Retail Banking Satisfaction Study, now in its 17th year, was redesigned for 2022. It measures satisfaction across seven factors (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.
“The findings of this new customer study mirror what we are seeing across the entire financial services spectrum,” said Rab Govil, Naehas CEO, after reviewing the Study’s results. He added, “These results reinforce the vital importance of offering an exceptional customer experience, and serve as a reminder for banks to enhance personalization, pricing and fulfillment in their offer management programs.” He noted that the industry’s digital transformation, the main focus of the recent Consumer Bankers Association CBA LIVE 2022 event, is increasingly supported by automation.
“As we help clients achieve dramatic results by automating compliance and marketing for optimal outcomes, we’re enthused to see this Study echo precisely what we’ve seen in the industry over the past years,” said Govil. Software as a Service (Saas) companies like Naehas continue to collaborate to enhance workflows, decrease cycle times and offer regulated content reviews through innovative platforms purposely-built for companies in the complex and highly-regulated financial services industry. The company provides offer management, disclosure and compliance management tools, such as Intelligent Reviews, which help finserv companies meet the ever-changing and growing demands of customers and regulators.
According to a J.D. Power news release, the study was based on responses from 101,587 retail banking customers of the largest banks in the United States regarding their experiences with their retail bank. It was fielded from April 2021 through January 2022. National banks are defined as banks with more than $300 billion in domestic deposits; regional banks are those with $65 billion-$299 billion in domestic deposits; and midsize banks are those with 50-100 branches nationally and at least 20 branches within a respective region.
A global leader in consumer insights, advisory services and data and analytics, J.D. Power is a pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior.