Consumer Satisfaction With Banks Improves Significantly For First Time In Years

Overall customer satisfaction with retail banks improved significantly from 2012, largely a result of improvements made by big banks, according to the J.D. Power and Associates 2013 U.S. Retail Banking Satisfaction Study.

Banks are ranked in 11 different regions based on overall customer satisfaction across six factors:

• account information
• channel activities
• facility
• fees
• problem resolution
• product offerings

After several years of relatively minor increases in overall satisfaction scores, customer satisfaction in 2013 improved significantly, with the largest increase among big banks. While as a group big banks have historically trailed smaller banks in satisfying customers by a fair margin, the satisfaction gap between big banks vs. midsize and regional banks has narrowed year over year.

During the past several years, many banks have eliminated free checking and implemented new fees, which has often negatively impacted overall satisfaction. The study found that as fees have begun to stabilize and banks have helped their customers better understand their fee structures, satisfaction in this area has begun to rebound. One-third (33%) of customers say they "completely" understand their fee structure, compared with 26% in 2012. Fees also have been a major source of customer problems and complaints. The stability in fees, coupled with banks placing more emphasis on preventing problems, has lowered the proportion of consumers experiencing a problem by 3 percentage points year over year, to 18% in 2013.

Consumers appreciate the personal service they receive at their branch, but such interactions are slowly declining as the numbers of online, ATM and mobile banking transactions increase. This trend is especially pronounced in mobile banking, where usage has increased to 17%, up from 11% in 2012, and the average number of mobile transactions per customer has increased to 51 per year, up from 29 in 2012. As banks roll out envelope-free ATM deposits and deposits by mobile phone, customers are finding it easier to handle routine transactions without needing to visit their branch.

"Successful banks are not pushing customers out of the branch, but rather providing tools that make it easier to conduct their banking business when and where it is convenient for them," said Jim Miller, senior director of banking at J.D. Power and Associates. "Customers are quickly adopting mobile banking, making it a critical service channel for banks, not just a ‘nice to have’ option."

"Many of the big banks have made great strides in listening to what their customers are asking for — reducing the number of problems customers encounter and, more importantly, improving satisfaction with fees," Miller added. "Consumers today are likely to find banks of all sizes offering the level of convenience, technology and personal service they have come to expect."

This is the eighth year J.D. Power has conducted this customer satisfaction study, making it the longest-running and most in-depth survey of the retail banking industry, with feedback from more than 50,000 consumers covering various aspects of their banking experience.