Now in its fifth year, this year’s
JD Power Satisfaction Index finds that overall satisfaction of
retail banking customers in the US averaged 748 on 1,000-point
scale – a slight decrease from 749 in 2009.

The brand image of banks also
continues to decline, with customers perceiving banks as being more
profit-driven than customer-driven, compared with 2009.

In addition, the percentage of
customers who say they “definitely will not” switch banks during
the next 12 months has decreased significantly during the past
three years to 34% in 2010, compared with 46% three years ago in
the 2007 study.

The 2010 US Retail Banking
Satisfaction Study is based on responses from nearly 48,000
respondents (almost double the 28,000 respondents surveyed in 2009)
regarding their experiences with their banking provider and was
conducted in January and February this year.

The gap in loyalty between
customers of larger and smaller banks is marked: 41% of customers
at smaller banks say they “definitely will not” switch, compared
with 32% at larger banks.

Acquisition rates are also
improving at smaller banks, with new customers accounting for 8% of
the customer base, compared with an industry average of 6%.

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Poor customer service, the most
common reason given for switching banks, is cited by 37% of
customers who changed their primary bank in 2010.

Fees continue to have a major
impact on customer loyalty, with 29% of customers who switched
banks in 2010 citing high fees for products or services as their
reason for switching.

But the study also finds that
customers may be highly satisfied even when they are charged bank
fees, provided that they perceive they are receiving sufficient
value in exchange. When satisfaction with fees is above average,
customer’s ratings for branch access and appearance, promptness of
being served, and the bank’s website are also higher than

The report highlights the growing
popularity of direct banking, with 51% of respondents in 2010
indicating a preference for online banking, an increase from 45% in

In addition, 7% of customers report
using a mobile device to execute such transactions as checking
balances, transferring funds and paying bills.

The study analyses customer
satisfaction with the retail banking experience based on six
factors: account activities; account information; facility; fees;
problem resolution and product offerings.

No overall ‘winner’ is stated,
though looking at the top placements in the 11 regional groups,
Arvest Bank, the highest-ranked bank in the Southwest region,
scored the highest rating of 835.

Frost National Bank ranks highest
in the Texas region (829), with other top ranked regional lenders
including United Community Bank in the Southeast region (815),
Commerce Bank in the Midwest (809), Northwest Savings Bank (808) in
the Mid-Atlantic region, Arvest in the South Central area (805),
and in North Central, Flagstar Bank (800).

BankAtlantic ranks highest in
Florida (792), with the remaining top-rated regional ‘winners’
including Eastern Bank (787) in New England, Bank of the West (782)
in California and Sterling Savings Bank (767) in the Northwest.

“As retail banking customers become
considerably less loyal, banks need to focus on getting the
fundamentals right,” said Michael Beird, director of banking at JD
Power and Associates.

“Banks that get back to the basics—such as maintaining a clean
branch and greeting customers upon entering—may help to alleviate
some of the distress customers are experiencing and increase their
overall satisfaction.”


Top 8 ranked banks in the
California region for overall customer satisfaction


Score of out

Bank of the West


Union Bank of California


Wells Fargo




California regional average




US Bank


Bank of America


Chase/Washington Mutual


Source: JD Power & Associates 2010
Retail Banking Satisfaction Study