U.S. retail bank customers are increasingly losing confidence in their banks, raising concerns about customer attrition. According to the latest J.D. Power 2024 U.S. Retail Banking Satisfaction StudySM, released today, consumer trust in retail banks has experienced a significant decline over the past two years. Issues such as unexpected fees, subpar customer service, and negative press have emerged as primary factors eroding customer trust. The study reveals that 13% of bank customers are considering switching institutions within the next 12 months.
Jennifer White, senior director of banking and payments intelligence at J.D. Power, highlighted the importance of customer interactions in shaping satisfaction and trust levels, stating, “Retail bank customers interact with their bank every three days, on average, across a combination of digital, phone, and in-branch channels, and the tenor of those interactions has a massive influence on customer satisfaction and overall levels of trust.”
Despite the industry’s efforts to enhance customer experience, many banks are falling short in crucial touchpoints by treating customers impersonally. White emphasized the need for banks to focus on fundamental interactions, proactively address issues, and provide personalized advice to retain deposits and foster customer loyalty and trust.
Key Findings from the 2024 Study:
- While overall customer satisfaction remained steady over the past year, trust levels have significantly declined for the second consecutive year.
- Factors contributing to the erosion of trust include unexpected fees, delays in fund availability, negative media coverage, errors attributed to customers, and branch closures.
- Customer loyalty is increasingly at risk, with 8% of retail bank customers changing their primary bank, up from 5% in 2018. Additionally, 13% of customers are considering switching banks within the next year.
- Account fees and poor customer experiences are cited as primary reasons for potential bank switches.
- Delivering on basic customer service fundamentals, such as welcoming customers, providing fast service, expressing gratitude, and using customers’ names, significantly boosts branch customer satisfaction scores.
The study also ranks banks by region based on customer satisfaction:
- California: U.S. Bank (657)
- Florida: Fifth Third Bank (689)
- Illinois: Wintrust Community Banks (696)
- Lower Midwest Region: BancFirst (718)
- Mid-Atlantic Region: Capital One (692)
- New England Region: Bangor Savings Bank (726)
- North Central Region: City National Bank (707)
- Northwest Region: Glacier Bank (703)
- New York Tri-State Region: Capital One (673)
- Pennsylvania: Huntington (693)
- South Central Region: Chase (703)
- Southeast Region: United Community Bank (724)
- Southwest Region: 1st Bank (687)
- Texas: Frost (753)
- Upper Midwest Region: Associated Bank (669)
The study underscores the importance of customer trust and satisfaction in the retail banking sector and provides insights into areas requiring improvement.
