One of the main US consumer banking industry surveys has
reported that customer satisfaction declined substantially last
year, though a select few banks managed to improve their scores.
Dissatisfaction with banking fees remains the most commonly
reported problem by US bank customers, Charles Davis
discovers.
It was bound to happen: earnings pressure, tight margins and an
uneven credit market have had an impact on bank customer service,
according to the JD Power and Associates 2008 Retail Banking
Satisfaction Study. The study found that overall satisfaction with
the retail banking experience has decreased significantly since
2007 as the cost-cutting underway in many US banks is making itself
felt in the branches, call centres and other delivery channels.
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JD Power said that poor problem resolution, long wait times and
increasing fees all contributed to a 26 index-point drop on a
1,000-point scale to 737 in 2008.
“Many US consumers hold banks responsible for the current
housing and mortgage crisis, and then many banks have sought cost
savings through the delivery channels, exacerbating the
dissatisfaction,” Rockwell Clancy, executive director of financial
services at JD Power and Associates, told RBI.
Clancy said that dissatisfaction with fees is 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 and 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
contributed to the drop in satisfaction.
Banks with below-average satisfaction rankings included
BB&T, Chase, Bank of America, Citibank and Regions.
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By GlobalDataSome US banks reversed the trend, however, recording increases
in customer satisfaction even in tough times. JD Power awarded top
scores by region: Commerce Bank (now owned by Canada’s TD
Financial) ranks highest in the Mid-Atlantic region with 781
points; Commerce Bancshares (not owned by TD) ranks highest in the
Midwest region with 750 points; BancorpSouth Bank ranks highest in
the Southeast Region with 782 points; Wachovia, with 802 points,
led the Southwest Region; and Bank of the West ranks highest in the
West region with 772 points.
Clancy said that these banks
maintained exceptional customer service despite facing the same
pressures plaguing US retail banks across the country.
“It takes real discipline to keep focus on the customer
experience these days, but our study shows that it is well worth
the effort,” he said, adding that the study found that retail banks
that provide high levels of customer satisfaction have more
committed customers. Increasing by even 5 percent the number of
customers who are committed can lead to incremental deposit growth
of 3 percent annually, he said.
Clancy said that banks should be more up front about disclosing
fees. Customers are fine with fees when the value is apparent, and
developing a set of policies for fees and enforcing them is crucial
to keeping customers informed, he said. The industry’s fees rose
across the board, the survey found: the percentage of US
institutions charging account maintenance fees rose to 21 percent
from 17 percent. ATM fees rose to 19 percent from 15 percent, check
order fees rose to 21 percent from 11 percent, and overdraft fees
rose to 22 percent from 14 percent.
A new dimension of this year’s study is analysis of
consumer-generated online conversations regarding retail
banking-related issues. Increased fees and increased annual
percentage rates were the most-discussed concerns in online
posting. Analysis of online conversations 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.
Andy Harmening, the head of the regional banking group at Bank
of the West, said that the bank has spent years honing its
evaluative tools in an effort to constantly monitor customer
service.
“There are a lot of pieces to it,” Harmening told RBI.
“It must be visible and easy to track and produce trend views. Our
numbers overall are up, but there are always factors worth looking
at more closely.”
Bank of the West measures several components of the customer
experience, from the quality of the information provided to
customers all the way down to the precise way in which branch
customers are welcomed by staff. “We have ways that we want things
done, and we make it a central part of the formula we use to
compensate staff,” Harmening said. “It’s that serious to us.”
At Wachovia, another JD Power winner, the top ranking represents
a major turnaround for a bank once beset by customer service woes.
“It’s been quite a journey,” said Andrea Bierce, senior
vice-president of customer experience and loyalty for Wachovia.
Wachovia formed WISE (Wachovia Is Service Excellence) – a group
of the bank’s top retail leaders, including the CEO, that focuses
once a month for 90 minutes on customer service. Bierce’s 60-person
team was an outgrowth of that effort, monitoring service across the
entire enterprise and responding to any dips in performance.
Wachovia’s efforts to monitor service are legendary: the bank
conducts 2,000 live interviews a night, every weeknight, with
customers.
“Every Thursday night we issue 3,400 flash reports based on the
surveys, which give our financial centres a Friday morning read
that becomes a meeting at every financial centre in the country,”
Bierce said. “We’re looking at all of them, too, all over the
country, every day, and we’re looking to address the dips, but also
to reward the perfect scores, which are far more prevalent.”
