U.S. retail bank customers are losing faith in their bank, and customer attrition is a concern.
According to the J.D. Power 2024 U.S. Retail Banking Satisfaction Study, released recently, 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.”
This year, 13% of bank customers say they “are likely to switch institutions in the next 12 months.”
Jennifer White, senior director of banking and payments intelligence at J.D. Power, said:
“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. 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.”
Following are some key findings of the 2024 study:
- 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. 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.
- 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.
- 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.
The study measures customer satisfaction “with retail banks in 15 geographic regions.”
Highest-ranking banks and scores by region are as follows:
- California: U.S. Bank (657) (for a fourth consecutive year)
- Florida: Fifth Third Bank (689)
- Illinois: Wintrust Community Banks (696) (for a third consecutive year)
- Lower Midwest Region: BancFirst (718) (for a second consecutive year)
- Mid-Atlantic Region: Capital One (692)
- New England Region: Bangor Savings Bank (726) (for a seventh consecutive year)
- North Central Region: City National Bank (707)
- Northwest Region: Glacier Bank (703)
- New York Tri-State Region: Capital One (673)
- Pennsylvania: Huntington (693) (for a second consecutive year)
- South Central Region: Chase (703)
- Southeast Region: United Community Bank (724)
- Southwest Region: 1st Bank (687) (for a fourth consecutive year)
- Texas: Frost (753) (for a 15th consecutive year)
- Upper Midwest Region: Associated Bank (669)
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.”
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.”
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 45-100 branches nationally and at least 20 branches within a respective region.”
