JD Power released its annual Retail Banking satisfaction survey last week, showing that banks are not providing adequate support to customers during financial difficulties. According to the study, only 44% of banks support customers during financial difficulties as they should be.
That percentage is despite the fact that 63% of customers said they would not switch banks if they felt supported and 78% said they would use the bank again if they felt supported.
And while banks score well on trust, they score lowest when it comes to saving customers time and money. However, there are some steps banks can take to rectify this.
“Ensuring that the conversation and interaction with the bank is easy and not overlooking the fundamental operational principles of accuracy, security and speed is key, but convenience is key,” Jennifer White, senior consultant in banking and payment intelligence at JD Macht, told ZDNet†
To help customers save money, White said banks could do more with personalized messaging and financial literacy. “It’s important for banks to make sure they meet their customer base where they are. That they use the information they have to understand the challenges customers face, and the answers for [those challenges],” she said.
For example, providing financial knowledge to help customers make more informed financial decisions would help customers feel more supported. In addition, banks could provide personalized alerts. For one customer, that may seem like getting the assurance that a bill has been paid. For another, it could be a face-to-face or digital conversation about paying a fee and the bank reaching out to see if they can help the customer avoid that fee in the future.
“It’s that idea that the bank somehow knows the customer and their behavior and can then lead them to positive financial behavior. And everyone from the financially vulnerable to the financially healthy wants that. The financially healthy are at the same time seeking reassurance time for the financially vulnerable to seek help,” White said.
The JD Power survey found that while banks fail to save time and money, they still rank highly in customer trust. Personal transactions can of course lead to discussions about customers’ banking practices, but that is more difficult in a digital banking environment.
According to White, customers are still looking to banks to provide advice and guidance, which would lead to higher satisfaction scores. Advice can take the form of personalized messages about products and services or personalized messages about techniques to save and manage money.
“If someone only communicates digitally with a bank instead of someone who communicates completely personally in a branch, digital satisfaction is lower. So there is a gap that banks have to close when consumers are forced to communicate digitally. Personalization is one of the keys to closing that gap,” she said.
According to the survey, when asked how they want their banking experience to be personalized, 46% said they want help avoiding fees, and 37% said they want account alerts. And while many banks have recently reduced overdraft fees, this has gone largely unnoticed. A big part of that disconnection is communication.
“It’s about communicating proactively rather than reactively. Banks need to make sure their customers know when a fee is due so there are no hidden surprises and make it clear that they’re one of the [fees]’ said White.
With inflation of 8.5% in March, this is a primary concern for consumers. Combine that with unnecessary costs and it increases the financial stress of the consumer even more. When consumers feel that their financial institutions are not adequately supporting them in these times, they are likely to be less satisfied.
“At present, even among the healthy, [inflation is] a concern. But in the past four months, that curve has not increased. It’s high, almost at a plateau, and people are taking actions like cutting discretionary spending. But the need for help is increasing, and there is a part [of consumers for whom] food insecurity is increasing. These are concerns that consumers have, and when these concerns are mixed with charges at a bank, the situation only gets worse,” White said.
The results of the Retail Banking Study 2022 are based on 101,587 completed surveys collected over the past year across four waves of data collection. A bank is only considered in the survey as long as it receives 200 completes over the four waves of data collection.