Retail bank customers are losing faith in their banks, with a decline in satisfaction seen in the last two years. This is driven by a decline in trust.

The percentage of customers that have switched banks has gone up. Moreover, some 13% of bank customers say they are likely to switch institutions in the next 12 months. Among the potential fixes for this are better communication and more personal customer experience. An overall back to basics approach, in other words.

“Bank customers interact with their bank every three days, on average, across a combination of digital, phone and in-branch channels. The tenor of those interactions has a massive influence on customer satisfaction and overall levels of trust,” said Jennifer White, senior director of banking and payments intelligence at JD Power.

“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 personalised advice.”

JD Power 2024 US Retail Banking Satisfaction Study key findings

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.

Customer loyalty at risk. This year, 8% of retail bank customers say they have changed their primary bank, up from 5% in 2018. What’s more, 13% of retail bank customers say they “probably will” or “definitely will” switch banks in the next 12 months. Fewer than half (46%) of bank customers say they are certain they will remain with their current bank in the next year.

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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.

JD Power 2024 US Retail Banking Satisfaction Study: Highest-ranking banks and scores by region

California: US 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)