When large and mid-size banks effectively blend digital offerings with a personal touch they are on the right track to having a lot of satisfied customers, according to a recent J.D. Power study.
Researchers evaluated 200 regional and midsize banks nationwide and identified the highest-scoring banks in 11 regions. Their findings indicate that customers who exclusively use digital tools or only use physical branches are the least satisfied with their overall banking experience than those who use both.
Customers rated their banking satisfaction level on a scale of 1,000 possible points. The highest customer satisfaction rating (823) came from those who said they used a branch at least twice in the past three months and also used online or mobile banking.
The frequency with which customers who also use digital tools visit their bank’s branch greatly impacts their overall satisfaction, the findings show. Customers who mostly used digital banking but came to a branch once in the past three months rated their satisfaction much lower than those who visited their branch at least twice in that timespan (808).
The lowest satisfaction rates were recorded among those who only use branches (804) and those who only use online or mobile channels (793).
Researchers found that weaknesses in three main aspects contributed to lower satisfaction scores among digital-only customers: communication and advice; products and fees; and opening new accounts.
“There is no doubt that digital banking channels give banks an enormous opportunity to reduce costs, but the risk is that those cost savings come with lower levels of customer engagement,” J.D. Power Senior Banking Practice Director Paul McAdam said in a press release. “Right now, retail banks need to address the growing digital divide that is emerging within customer segments. Successfully navigating that transition will require banks to provide better, more personalized advice that is consistent across both digital and branch interactions and to ensure that customer needs are met, regardless of channel.”
The gap in satisfaction between digital-centric and branch-dependent customers is most pronounced among millennials (35-point satisfaction gap) and Generation X (24-point satisfaction gap) but cuts across all generation.
“While the retail banking industry has a great deal of work to do to bridge the growing digital divide, some leaders have already begun to make huge progress on the digital learning curve,” McAdam said. “Some of the best practices being pioneered today by digital leaders include highly personalized digital interactions along with branch transformation efforts that serve the needs of both digital-centric and branch-dependent customers.”
Large banks were found to have the largest concentration of digital-centric customers (47 percent), with Capital One and Bank of America recording the highest percentages of digital-centric customers (55 percent and 53 percent, respectively).
Among the highest scoring entities were: U.S. Bancorp in California; TD Bank in Florida; First National Bank of Omaha in the Midwest; Northwest Savings Bank, Warren, Pa., in the Mid-Atlantic region; Bangor Savings Bank, Bangor, Maine, in New England; City National Bank, Charleston, W.Va., in the North Central region; Trustmark National Bank, Tupelo, Miss., in the South Central region; United Community Bank, Blairsville, Ga., in the Southeast; MidFirst Bank, Oklahoma City, in the Southwest; and Frost Bank, San Antonio, in Texas.