Consumers More Satisfied With Banks, Consumer Report Says

Consumer sentiment toward retail banks appears to have reversed its historical downward slide, increasing in 2011 for the first time since 2007, according to the J.D. Power and Associates 2011 U.S. Retail Banking Satisfaction Study released today.

The study, now in its sixth year, finds that retail banking customer satisfaction has improved by four index points from 2010 to an average of 752 (on a 1,000 point scale) in 2011. Satisfaction with most factors of the retail banking experience—account information; facility; problem resolution; and product offerings—has improved from 2010, while satisfaction with account activities has remained stable. In particular, satisfaction with in-person branch interaction, product offerings and account information have all improved significantly. In addition, customer perceptions regarding their bank’s brand reputation and image have improved in 2011 for the first time since 2008.

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 percent in 2010 to 43 percent in 2011.  The primary driver of the decline in fee satisfaction has been changes in how fees are assessed, with 18 percent of customers in 2011 saying their fee structure had changed during the past 12 months, compared with 16 percent in 2010.  When fee structures are changed, overall satisfaction decreases by an average of 84 index points.

In California, Rabobank ranks highest in the region with a score of 796, and performs particularly well in the fees and account activities factors. Bank of the West (777) and Union Bank/Frontier Bank (766) follow in the regional rankings.

“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-publicized attempts by banks to recoup lost revenue due to Reg E debit card revisions by dropping free checking and repricing accounts has clearly had a negative effect,” said Michael Beird, director of banking services at J.D. Power and Associates. “The good news for consumers, and the challenge for the industry, is that banks are being forced to clearly define the value they’re providing for the prices they’re charging.”

According to Beird, charging fees and delivering high levels of satisfaction are not mutually exclusive.  Customers who pay fees and also express high levels of satisfaction are more likely to report having the following positive experiences: receiving a thorough needs assessment when opening an account that ensures they are using the right product; engaging in discussion of fees upfront; experiencing better personal interactions with branch and call center staff; having fewer problems; and receiving more effective resolution when problems do occur. An additional driver of improved satisfaction with fees is providing customers with a full menu of products that have tangible value, such as debit cards tied to rewards programs, free online banking and automatic overdraft protection.

“Being charged a fee does not necessarily have to result in dissatisfaction,” said Beird. “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.”


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