US consumer sentiment
toward retail banks has increased for the first time since 2007
according to marketing consultancy JD Power.
Now in its sixth year,
the 2011 JD Power Satisfaction Index was released on 21 April. It
reported that overall satisfaction of retail banking customers in
the US averaged 752 on 1,000-point scale – up from 748 in 2010.
Satisfaction with most factors of the retail banking
experience—account information, problem resolution; and product
offerings—has improved from 2010, while satisfaction with account
activities has remained stable.
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Satisfaction with fees,
however, has decreased considerably from 2010, even though the
proportion of customers who report they were charged fees by their
bank has declined from 53% in 2010 to 43% in 2011.
The primary driver of
the decline in fee satisfaction has been changes in how fees are
assessed, with 18% of customers in 2011 saying their fee structure
had changed during the past 12 months, compared with 16% last
year.
When fee structures are
changed, overall satisfaction decreases by an average of 84 index
points.
Michael Beird, director
of banking services at JD Power, said:
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By GlobalData“While there has been a
concerted effort made by the banking industry to get back to basics
and provide customers with a satisfying retail bank experience
overall, the well-publicised attempts by banks to recoup lost
revenue due to Reg E debit card revisions by dropping free checking
and re-pricing accounts has clearly had a negative
effect,”
According to Beird,
being charged a fee does not necessarily have to result in customer
dissatisfaction.
“Customers who
completely understand their bank’s fee structure and value the
products and services they receive tend to have higher levels of
overall satisfaction, despite paying fees.”
Other notable finding in
the 2011 JD Power Satisfaction Index included:
- Mobile banking growth: mobile
applications represent one of the fastest-growing transaction
channels and while adoption remains sporadic, generational
differences have clearly emerged. In 2011, 23% of Generation X and
Y customers said that they use mobile banking, up from just 11% in
2010 Just 9% of customers born before 1965 said that they use
m-banking applications. - 75% of Generation X customers and 87
percent of Generation Y customers indicate they use social media
applications; - One in eight customers who said that they
use social media say that they have used it to contact their bank
for service-related issues;
No overall ‘winner’ is
stated, though looking at the top placements in the 11 regional
groups.
Regional
winners:
California: Rabobank
ranked highest in the region with a score of 796; it performed
particularly well in the fees and account activities factors. Bank
of the West (777) and Union Bank/Frontier Bank (766)
followed;
Florida: Regions Bank ranked highest in
Florida with a score of 789; SunTrust Banks (788) and Wachovia
(786) ranked second and third;
Mid-Atlantic: With a score of 804,
Northwest Savings Bank topped the regional poll. It performed well
in product offerings. Susquehanna Bank followed with a score of
792; S&T Bank ranked third with 791;
Midwest
Region: First Midwest Bank ranked highest (775) and
performed particularly well in product offerings and account
information factors. Commerce Bank and UMB Bank tied next with
774;
New England
Region: Eastern Bank topped the survey with
791.
Rockland Trust followed
with 798; TD Bank and Wachovia Bank tied third with 760;
North Central
Region: FirstMerit Bank and Flagstar Bank tied first with
802;
Northwest
Region: With a score of 794, Umpqua Bank ranked first in
the region and performed well in facility and product offerings.
West Coast Bank (792) and Sterling Savings Bank (789)
followed;
South Central
Region: Hancock Bank ranked first with a score of 817;
Whitney National Bank (799) and Arvest Bank (798) ranked second and
third respectively;
Southeast
Region: First Federal led the survey with a score 818;
United Community Bank followed with 813, and First Citizens Bancorp
third with 809.
Southwest
Region: Arvest Bank (809) was well ahead of the second and
third ranked lenders, Zions First National Bank (782) and Bank of
Oklahoma (779);
Texas:
With a score of 849, Frost National Bank ranked highest in the
region and performed well across all six factors, particularly
account activities and fees. First Financial Bank (805) and
Woodforest National Bank (792) came a distant second and
third.
Bank of America (BofA),
the country’s largest retail lender, performed particularly poorly
in the survey.
In each of the 11
regions, BofA’s index score underperformed the regional
average.
In California, the
average regional index score was 742; BofA ranked bottom in the
regional survey with a score of 719. In the mid-Atlantic region,
BofA ranked second-bottom of the 32 lenders in that market to
feature with a score of 716 (regional average 743).
In the Northwest region,
BofA ranked bottom with 703 (regional average 741).
The survey was based on
responses from almost 52,000 retail banking customers in January
and February 2011.
