Digital-only bank customers less satisfied than branch users

Digital-only bank customers less satisfied than branch users

More than a quarter of Americans now bank exclusively through digital channels, but these customers are less satisfied with their service than people who use branches, according to a survey from JD Power.

Banks have made huge investments over the last decade in an effort to encourage customers away from expensive branch networks to online and mobile services.

Of 88,000 retail customers of 200 of the largest banks in the US, 28% are now digital-only - having exclusively used online and mobile channels in the last three months. But, this section of the population is less satisfied with their banking experience.

JD Power measured satisfaction in six areas: channel activities, communication and advice, convenience, new account opening, problem resolution, and products and fees. This was then translated into a satisfaction score out of 1000.

Digital-only customers scored 791 out of 1000, while people who only use branches scored 804, and those that used both channels but visited a branch at least twice every three months, scored 823.

Paul McAdam, senior director, banking practice, JD Power, says: "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 personalised advice that is consistent across both digital and branch interactions and to ensure that customer needs are met, regardless of channel.”

The lower satisfaction scores found among digital-only customers are largely driven by weaker performance across three factors in the study: communication and advice, products and fees, and new account opening.

Meanwhile, the gap in satisfaction between digital-centric and branch-dependent customers cuts across all generations of retail bank customers, but it is most pronounced among millennials (35-point satisfaction gap) and Gen X (24-point satisfaction gap), bucking the conventional wisdom that younger banking customers do not like to use branches.

In recent months there have been signs that banks are rethinking their approach, with both Bank of America and Chase committing to the opening of hundreds of new branches that will focus on helping customers with more complex requirements.

Broken down by region, US Bank is the top dog for customer satisfaction in California, while TD leads the way in Florida, Bangor Savings Bank in New England and Frost Bank in Texas.

Comments: (2)

A Finextra member
A Finextra member 04 May, 2018, 21:59Be the first to give this comment the thumbs up 0 likes

I think what this shows is for the digital only customer that the banking apps are not yet sophisticated enough to provide the level of service desired.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 May, 2018, 20:05Be the first to give this comment the thumbs up 0 likes

That's the most obvious explanation but branch staff is not the epitome of sophistication, either:)

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