US retail bank customers have been through the ringer during the past few years. Inflation, market volatility and rising interest rates have contributed to increased prices for goods and services. This combines to leave 69% of customers classified as financially unhealthy according to JD Power.
But banks that address this challenge head-on with personalised financial advice boost customer satisfaction and build strong customer engagement.
The JD Power US Retail Banking Advice Satisfaction Study reveals that just 38% of customers recall ever receiving such advice. Among those, just 55% say it completely meets their needs.
“Banks are sitting on a goldmine of customer goodwill,” said Jennifer White, senior director for banking and payments intelligence at JD Power.
“They have significant opportunities to build lifetime customer value by delivering financial advice and personalised guidance to their customers. When advice hits the mark, customer satisfaction increases 228 points, but most bank customers don’t recall ever receiving such advice. Among the small proportion that do receive advice, only 55% say it was effective. There’s still a great deal of work to be done to unlock the full value of this powerful tool.”
JD Power US Retail Banking Advice Satisfaction Study 2023 key findings
Customer satisfaction with financial advice is up sharply. Overall satisfaction with advice and guidance provided by retail banks rises 37 points y-o-y to 638 (on a 1,000-point scale). The increase is evident across all attributes of satisfaction and across all levels of financial health. Strong advice is delivered frequently and includes high-quality content. It is relevant and personalised to the customer, clearly provides a call to action and conveys concern for customer’s needs.
However, most customers don’t remember receiving advice. While successfully delivered financial advice is consistent with significant gains in customer satisfaction, nearly two-thirds (62%) of bank customers do not recall receiving financial advice from their bank in the past year.
Successful advice strategies leverage multichannel customer engagement. The highest performers both in financial advice customer satisfaction and in customer recall merge branch-based experiences with a strong digital presence to reinforce in-person interactions. Virtual assistants and personal financial management tools can help.
Different messages are required for different customers argue JD Power. Although overall satisfaction with financial advice has increased year over year, many banks have struggled with successfully delivering financial advice to those in all customer segments. Some banks have connected better with financially healthy customers. But others have connected better with financially unhealthy customers. Only Bank of America, Chase and Wells Fargo have managed to significantly improve on advice satisfaction in both customer segments.
Bank of America ranks highest in customer satisfaction with retail banking advice with a score of 673. Citi (657) ranks second and KeyBank (648) ranks third.
The study also captures responses from customers about their satisfaction with the financial health support provided by their financial partners. Top-performing banks in the banking financial health support index are (in alphabetical order): Bank of America, Bank of the West, Chase, Citi, Capital One and Huntington.
Top-performing credit card providers in the credit card financial support index are (in alphabetical order): American Express, Bank of America, Discover, Fifth Third Bank, PNC and Wells Fargo.