Two Satisfaction Surveys
Source: CBA Reports
Consumer Bankers Association
Arlington, VA
www.cbanet.org
The J.D. Power and Associates 2008 Retail Banking Satisfaction Study, in its third year, found a drop in satisfaction that it attributes to dissatisfaction with fees. However, the report cited a separate study which found an increase in satisfaction for users of home equity lines of credit.
The study reported dissatisfaction with fees as the most commonly reported problem by customers, as well as the second-most common reason for switching financial institutions. In addition, a rise in the number of problems experienced, problems that go unresolved, increases in wait times to see tellers or speak to phone representatives, and declines in the ease of accessing branches, all contribute to the drop in satisfaction.
The study also found that retail banks that provide high levels of customer satisfaction have more highly committed customers, which are essential to financial growth. Increasing by even 5% the number of customers who are highly committed can lead to incremental deposit growth of 3% annually.
“As banks struggle to meet shareholder demands, the common reaction is to focus on short-term financial gains by increasing fees and reducing staff - leading to longer wait times and poor problem resolution,” said Rockwell Clancy, executive director of financial services at J.D.Power. “But now is the time for banks to really differentiate themselves from competitors by focusing on customer service and convenience...”
A new dimension of this year’s study is analysis of consumer-generated online conversations regarding retail banking-related issues conducted by Powers’ Web Intelligent Research.
While banks are a relatively frequent topic of conversation among the online consumer community, most of the conversation revolves around consumers’ daily activities regarding banking rather than national issues such as sub-prime lending. This further indicates that overall ratings of banks provided by respondents for this study are most often driven by personal experiences. Increased fees and increased annual percentage rates were the most-discussed concerns in online posting. Analysis of online conversations between April 2007 and March 2008 found that nearly 80% of customer sentiment toward banks is positive.
The study analyzes customer satisfaction with the retail banking experience through six factors: transactions, account statements, account initiation/product offerings, convenience, fees, and problem resolution.
The 2008 study, fielded in January, is based on responses from 19,602 households regarding their experiences with their primary banking provider.
The second study, Powers’’Home Equity/Loan Origination Study, shows that, despite an economy affected by a stagnant housing market, decreasing home values, and upheaval among lenders, overall customer satisfaction with the home equity line of credit/loan origination process has improved since 2007.
Now in its third year, the study measures customer satisfaction using four factors: (in order of importance) application/approval process (36%), closing (35%), loan officer/representative or banker (26%), and problem resolution (4%).
The study found these five key performance indicators to satisfying customers: approving applications and providing customers with access to their funds quickly; setting and meeting expectations during the application approval process; avoiding surprising the customer during the origination process; being versatile and flexible in the location of the closing; and being mindful of the pitfalls of using a mortgage broker.
The study, fielded in February and March, is based on responses from 3,176 customers who originated a home equity line/loan between February 2007 and January 2008.
