J.D. Power released its annual Retail Banking Satisfaction survey last week, revealing that banks are lacking in their support of customers during financial hardships. According to the study, only 44% of banks are supporting customers during financial hardship as well as they should be.
That percentage is in spite of the fact that 63% of customers indicated they wouldn’t switch banks if they felt they were being supported, and 78% indicated they would reuse the bank if they did feel supported.
And while banks are ranking well in trust, they are ranking the lowest when it comes to saving customers time and money. However, there are some steps banks can take to rectify this.
“Making sure the conversation and the interaction with the bank is convenient and doesn’t overlook the fundamental operational tenets of accuracy, security, and speed is key, but convenience is critical,” Jennifer White, senior consultant in banking and payment intelligence with J.D. Power, 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 are meeting their customer base where they are. That they are using the information they have to understand the challenges customers are facing, and personalizing or customizing the responses for [those challenges],” she said.
For example, providing financial literacy to help clients make better informed financial decisions would contribute to helping customers feel more supported. In addition, banks could provide personalized alerts. For one customer, that might look like receiving assurance that a bill has been paid. For another, it might be an in-person or digital conversation about having paid a fee and the bank reaching out to see if they could help the customer avoid that fee in the future.
“It’s that idea that the bank actually knows the customer and their behaviors in some way and can then direct them to positive financial behaviors. And everyone from the financially vulnerable to the financially healthy wants that. The financially healthy are looking for reassurance at the same time that the financially vulnerable are looking for help,” White said.
The J.D. Power survey found that, while banks are lacking in the time-and-money saving category, they still rank highly for customer trust. In-person transactions can naturally lead to discussions around customers’ banking practices, but that’s harder to do in a digital banking environment.
According to White, customers are still looking for banks to offer advice and guidance, which would lead to higher satisfaction ratings. Advice could take the form of personalized messages about products and services or personalized messages about techniques for saving and managing money.
“If someone is only interacting with a bank digitally versus someone who is interacting completely in person at a branch, digital satisfaction is lower. So there is a gap that banks need to close when consumers are forced to interact digitally. Personalization is one of the keys to closing that gap,” she said.
According to the survey, when asked how they’d want their banking experience personalized, 46% of customers said they wanted help avoiding fees, and 37% said they wanted to receive account alerts. And despite many banks recently reducing overdraft fees, it’s largely gone unnoticed. A big part of that disconnect is communication.
“It’s about making sure there is proactive communication versus reactive. The banks need to make sure that their customers know when a fee is coming so that there are no hidden surprises and make it clear that they removed one of the [fees],” White said.
With inflation reaching 8.5% in March, it’s a primary worry on consumers’ minds. Mix that with unnecessary fees, and it increases consumers’ financial stresses even more. When consumers don’t feel like their financial institutions are adequately supporting them during these times, they’re likely to feel less satisfaction.
“Right now, even among the healthy, [inflation is] a worry. But in the last four months, that curve has not increased. It’s high, almost at a plateau, and people are taking actions like reducing discretionary spending. But the need for assistance is increasing, and there is a portion [of consumers for whom] food insecurity is rising. These are worries that consumers have, and when these worries are mixed with fees at a bank, it just takes a bad situation and makes it worse,” White said.
The 2022 Retail Banking Study results are based on 101,587 completed surveys captured over four waves of data collection in the last year. A bank is only considered in the survey so long as it receives 200 completes over the duration of the four waves of data collection.