||To Counter Frustration with Fees, Banks Work On Other Areas of Customer Service
While consumers are growing increasingly dissatisfied with fees, banks are able to offset these feelings of frustration with higher satisfaction in other areas, such as banking facilities, account activities, and problem resolution, according to the J.D. Power and Associates 2012 U.S. Retail Banking Satisfaction Study.
The study, now in its seventh year, finds that overall retail banking customer satisfaction has improved by one index point in 2012 to an average of 753 (on a 1,000-point scale) from 2011. Customer satisfaction with the retail banking experience is measured in six factors: account activities; account information; facility; fees; problem resolution; and product offerings.
Satisfaction with fees has declined to 609, down significantly from 625 in 2011 and from 656 in 2010. Monthly maintenance fees have the most significant negative impact on fees satisfaction this year -- more so than in the 2011 and 2010 studies -- while fees assessed for ATMs and debit cards have less negative impacts on fees satisfaction.
"The negative reaction to fees reflects customers' irritation about paying for something they didn't have to pay for in the past," said Michael Beird, director of banking services at J.D. Power and Associates. "It also reflects a lack of their complete understanding about what they're getting for those fees. Customers understand why they're being charged for ATM and debit card use, but are not clear on what they're getting for monthly maintenance fees, which drives the bigger drop in satisfaction with those fees."
The study finds that despite the decline in fee satisfaction, banks, on average, are able to offset that negative impact on customer satisfaction in other areas, such as facilities and routine transactions. Customer satisfaction with bank facilities -- branch and ATM locations, appearance and hours of operation -- has improved this year to 779, compared with 771 in 2011 and 765 in 2010.
One behavior helping to increase satisfaction with the branch is that 76 percent of customers say they are greeted by a bank employee when they enter the bank, an increase from 68 percent in the 2010 study. In addition, customer satisfaction with the reliability and ease of using ATM machines has increased to 815 from 795 in 2011.
"Satisfaction with ATMs is driven by the increased reliability, user friendliness and functionality found in the newer generation of ATMs in which many banks have invested the past few years," said Beird. "One of the most pertinent metrics is the percentage of customers who use ATMs to make deposits has more than doubled over the past four years, from 19 percent in 2008 to 40 percent in 2012."
When looking at banks in aggregate by relative size, satisfaction with big banks is 743, a two-point increase from 2011, while satisfaction with midsize banks is up four points to 781. Regional banks experience a slight dip in overall satisfaction, to 759 from 760 in 2011.
"Big banks continue to lag the other banks in overall satisfaction, but they have made significant improvements in reducing the number of problems customers experience and in problem resolution, specifically resolving problems on first contact," said Beird.
The study also finds mobile banking, while still used by a relatively small proportion of customers, is increasing. Nearly one-fifth (16%) of customers cite using some mobile banking, compared with 10 percent in 2011. Among these customers, 11 percent use smartphone apps; five percent use texting for mobile interactions; and six percent use a mobile browser to access their bank. Smartphone apps are used most frequently to check account balances (74%) and transfer funds (47%). In addition, 18 percent of mobile banking customers use a smartphone to make deposits.
"Despite the progression in mobile banking, it still represents a small proportion of customers who regularly rely on the technology," Beird said. "What is interesting is that only one-half of customers using mobile banking report that they fully understand the capability of the technology. This represents an opportunity for banks to educate their customers, increase usage and potentially deepen customer share of wallet."
(Source: J.D. Power and Associates, 04/19/12)