According to a consumer survey conducted by J.D. Power, customer satisfaction with banks overall is rising, but midsize banks are lagging behind, missing the mark with key audience segments, such as millennials and minorities, with affluent customers still the least-satisfied customer segment.
According to the survey, improving consumer sentiment with the economy and personal finances has helped lift overall satisfaction with retail banks to 785 (on a 1,000-point scale) in 2014, up from 763 in 2013. Bank customers are experiencing fewer problems; when problems do occur, they are more satisfied with how they are resolved, reports J.D. Power. Discontent with fees has declined, per the survey, with fees satisfaction rising 46 points to 669, the highest level since before the 2010 study re-design.
However, satisfaction with midsize banks increased by only 11 points, compared with the 23-point increase in the industry overall. Further, satisfaction with midsize banks declined by 6 points among affluent customers.
"Midsize banks are falling behind in meeting the needs of the fastest growing demographic groups, millennials and minorities, especially in online, mobile and problem resolution," said Jim Miller, director of banking services at J.D. Power, in a written statement. "If midsize banks don't change their focus to adjust to demographic shifts, they are extremely vulnerable and risk losing market share to competitors and becoming irrelevant."
Among customers who switched banks during the past 12 months, the most common reasons are poor customer service (28 percent); branches not being conveniently located (21 percent); and interest rates that are not competitive (19 percent), the survey found. Only 15 percent of these customers cite high fees as a primary reason for switching.
The study measured consumer experience at banks in 11 regions across the U.S.
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio