Consumers seem to be softening their hate-hate relationship with the banking industry, according to a new report released Tuesday by the American Customer Satisfaction Index.
In fact, customer satisfaction with financial services in general — a category that includes banks, credit unions, health insurance, property and casualty insurance and life insurance — reached a new high in the third quarter of 2013, the report found.
The index is up 0.3 percent to 76.7 on a 0 to 100 scale, and overall customer satisfaction with retail banking is back to pre-recession levels, ACSI said. Customer satisfaction for banks grew by 1.3 percent over the past year to 78, which is an ACSI benchmark.
All of the big banks improved their rating, but smaller banks and credit unions outdid their larger competitors with scores of 83 and 85, respectively. Among the largest four banks, JPMorgan Chase kept its lead with a 3 percent gain to 76, while Citigroup increased 6 percent to 74. Wells Fargo rose one percent to 72.
The good news for Bank of America is that it registered its largest improvement in a decade, with more than a 5 percent increase. The bad news, however, is that at 69, it is still in last place and is the only bank that has yet to restore its pre-recession level of customer satisfaction.
A Structural Shift
Much of the improvement found in this latest report is due to structural shifts in the banking industry, ACSI Managing Director David VanAmburg told CRM Buyer.
“What we are finding is that banks have created high-quality websites and they have done a good job of gently nudging their customers in their direction,” VanAmburg said.
That, in turn, has also improved the customer experience for consumers who still use the brick-and-mortar branches because there are fewer people using them. Translation: fewer lines, better service.
Consumers, meanwhile, have adapted to the industry as well, avoiding as much as possible the thing they hate the most: fees. Fees have risen for the 15th straight year, noted Claes Fornell, ACSI founder and chairman — but this year there haven’t been any repercussions.
“In part, this is because a fair number of consumers are changing their behavior to avoid the fees by exclusively using their own bank’s ATMs and maintaining sufficiently large account balances,” he said.
Compare and Contrast
Of course, not all fees are equal, and not all banks are equally accommodating in allowing their customers to escape them. That observation could account for the finding in a separate survey on financial institutions by ForeSee.
It’s not an apples-to-apples comparison — ForeSee looked a wide range of institutions, including credit card providers and foreign banks, with a focus on the top brands. Nevertheless, it found that the financial services category has a large, 17-point gap separating the highest- and lowest-scoring brands and has the lowest aggregate score, with a 75.
That said, the satisfaction level is pretty good in financial services, at least, Larry Freed, CEO of ForeSee, told CRM Buyer.
That is important to banks because companies that score better in satisfaction have customers who are more loyal, willing to purchase more financial services and products, and likely to recommend the brand to family, friends and colleagues.
Here is the kicker, though: Pricing was tantamount to that satisfaction, Freed said. Service followed, and then product range.
“The takeaway is that customer service is critical for banks,” he concluded, “but in order to improve their standing with customers, they will have to focus on pricing as well.”