"Many retail banks are experiencing a decline in their brand image, especially in the current economic climate, where many consumers hold banks responsible for the current housing and mortgage crisis," said Rockwell Clancy, executive director of financial services at J.D. Power and Associates. "With customers experiencing more problems, longer wait times and more fees, that negative view is intensified."
The study also finds 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 percent the number of customers who are highly committed can lead to incremental deposit growth of 3 percent 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 Clancy. "But now is the time for banks to really differentiate themselves from competitors by focusing on customer service and convenience. Banks with higher levels of customer satisfaction will generate higher deposit growth and achieve better financial results over the long term."
A new dimension of this year's study is analysis of consumer-generated online conversations regarding retail banking -- related issues conducted by J.D. Power and Associates' Web Intelligence Research, Powered by Umbria(SM). 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 conversation between August 2007 and March 2008 also finds that nearly 80 percent of customer sentiment toward banks is positive. While the average number of mentions per institution was slightly fewer than 10,000, the three brands mentioned most frequently - Bank of America, Chase Bank and Citibank - represent more than one-half of the total mentions.
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. Study results by region are:
Mid-Atlantic Region: Commerce Bank (Bancorp) ranks highest in the region with a score of 781 points, performing particularly well in convenience. First National Bank of Pennsylvania (764) follows in the regional rankings.
Midwest Region: Commerce Bank (Bancshares) ranks highest in the region with a score of 750, performing particularly well in statements. WaMu (742) and Comerica Bank (739) follow in the region.
Southeast Region: BancorpSouth Bank ranks highest with a score of 782, performing well in the transaction factor. First Tennessee Bank (774) and WaMu (768) follow in the region.
Southwest Region: With a score of 802 points, Wachovia Bank ranks highest in the region, performing particularly well in the transaction factor. Bank of America, Capital One and Zions First National Bank follow with scores of 740, in a tie.
West Region: Bank of the West ranks highest in the region with a score of 772, performing particularly well in the transactions factor. Citibank (759) and Union Bank of California (746) follow in the regional rankings.
The 2008 Retail Banking Satisfaction Study is based on responses from 19,602 households regarding their experiences with their primary banking provider. The study was fielded in January 2008.
