Despite Surging Economic Unease, Consumers Are Happier with Their Banks (For Now)
Nervous consumers aren't blaming banks for their economic stress and even see some reasons to like them more. Yet banks continue to neglect key practices that could hold primary accounts.
By Steve Cocheo, Senior Executive Editor at The Financial Brand
In times like these, consumers people can take out their concerns on convenient targets, like their banks. Yet new J.D. Power research indicates that customers are actually happier with their primary banks.
In the J.D. Power 2025 Retail Banking Satisfaction Study, retail banks had an overall satisfaction score of 655 — out of a possible 1,000 —a significant year over year 11-point increase. Further, banks’ rating on the standard of "completely supports me in challenging times" is up by four percentage points.
"This is despite a lot of real-world challenges that are impacting people’s finances. Their deposits are eroding, their investments are declining," says Jennifer White, senior director of banking and payments intelligence, in an interview with The Financial Brand.
White says "the rosiness is a little surprising," but she credits improved customer communications for part of the increase in satisfaction ratings. (The chart above comes from the company’s most recent consumer pulse survey, not the retail satisfaction study.)
At the same time, the company’s research has identified a gripe that could not only brake improving satisfaction but become a fresh consumer target. Most surprising about that threat: It’s something that legislators, regulators and the industry addressed decades ago.
White spoke to these points, and also addressed key improvements in product design that only a handful of institutions have embraced.
A Key Communications Improvement: Consumer Banking Fees
The leading cause of account attrition, according to multiple years of this study, is fees — unexpected fees, too many fees, and the feeling that fees are too high. In the current atmosphere in Washington, with overdraft fee rules targeted by Republicans, and credit card late fees having been a recent cause célèbre, this could only get worse.
However, things aren’t that simple. White says that the study found that communication about fees and how to avoid or ameliorate them has improved. The study found a 5% improvement in "completely understand my bank’s fee structure," a 4% improvement in "very easy to find information about fees associated with accounts," and a 4% rise in "my bank completely communicated how to avoid being charged fees."
In fact, the study found that nearly half of the sample — 47% — say their bank is communicating well regarding how to avoid fees.
"Many institutions are helping customers understand their risk for fees and are empowering them to avoid the fees," says White.
White says there’s no one channel that ensures the level of awareness that keeps fees from becoming a retention problem.
Some customers get the message best through branches or via live phone reps. For others, an interstitial ad on a mobile app or a banner on an online banking site punches through. For others still, text alerts and the like get through best. White says those messages need to be reinforced by steps like social media posts that direct people to key website pages addressing fees. Emails helped hammer home the message.
"All have to be part of the messaging strategy in order for recall to be as high as possible, and for behavioral change to take place," says White.
Fees on ATM withdrawals that surprise the user, because they thought they were in-network, and fees for falling below minimum balances unexpectedly, rank as high annoyances, says White.
Banks must also recognize the differing generational impact of fees, warns White. "Younger generations are notably more likely to be paying bank fees," she says. She adds that 53% of Gen Z respondents paid some type of banking fee over the three months prior to being surveyed, while only 42% of Gen Xers and only 24% of Boomers paid fees.
Read more:
Getting Credited for Deposits is Getting to be a Sticky Point
Now, here’s the lurking issue: Funds availability.
This may seem surprising because Congress passed the Expedited Funds Availability Act, which addressed how quickly depositors should have various types of checks credited, in 1987.
Yet the study found that the biggest customer inconveniences cited arise from concerns over availability of funds, both in check deposits and in electronic funds transfer. In the latter category, 16% of consumers said delayed availability of funds following a deposit was their greatest beef, while 21% of those doing funds transfers complained about delayed availability of transferred funds.
"I think the next consumer rebellion will be around delays of availability of funds," says White. Waiting for funds to be good "is becoming less and less palatable to today’s consumer."
Banks’ focus on fraud affects other aspects of funds availability beyond timing. For example, 8% of funds transfer users complain about limits on the size of transfers.
Read more: Banks Get Greater Freedom to Innovate, But at What Cost?
Loss of Primacy and How to Build It Back
White says 17% of customers surveyed said they moved money away from their primary bank within three months of being polled. Of that group, 40% moved less than 10% of their primary bank balances, with 46% moving between 11%-50%, and another 14% moving over half of their money.
The most common reason give was necessity, like covering a bill, such as a loan. However, more significant in terms of competition, says White, is another reason: 28% moved for higher interest rates.
White says there are key practices that consumers indicate would help hold their money at their primary bank. Here are some of them, with the percentage of banks that offer it, based on respondents’ answers:
- Checking account earns interest: 22%
- Checking account offers free overdraft transfers from linked deposit accounts: 19%
- Access to credit when needed: 16%
- Earning rewards based on debit/checking account usage: 13%
- Having an account manager/financial advisor at the bank: 13%
- Checking account entitles borrowers to lower interest rates on loans: 8%
- Checking account entitles depositors to higher interest on money market and savings accounts: 7%
One last piece of advice from White:
Train branch staff to ask meaningful questions after someone’s been helped. Instead of just asking, "Is there anything else I can help you with today?," which can sound bland, ask more directly: "Is there anything else you are worried about today?" or "Is there something else that is confusing you?"
Why such questions? In a time of rising fraud, those are meaningful queries that can make customers feel like they are being taken care of. And, White adds, it enables bankers to prompt people to share what they really need from their bank.
Problem solving weighs heavily in satisfaction. The study found that among customers who had problems solved, that resolution could boost overall satisfaction scores at the individual level by hundreds of points.
Read more: Why Fraud Resolution is Critical to Building Customer Trust
