Americans may like the idea of smaller banks. But when it comes to their own finances, they're embracing the technology-driven convenience that's being offered by the industry's giants.
For the first time ever, the nation's six largest depository institutions scored higher than their smaller peers in overall customer satisfaction, according to the most recent survey data from the marketing firm J.D. Power & Associates. Those six banks are Bank of America, Citigroup, JPMorgan Chase, PNC Financial, U.S. Bancorp and Wells Fargo.
The customer-satisfaction survey, which has been conducted since 2006, compares the six big banks with regional banks and smaller institutions. Only banks with at least $3 billion in deposits are included in the survey. In all, about 20,000 consumers are polled online each quarter.
"What these customers are saying is, 'You know what, the big banks are doing a pretty good job,'" said Rocky Clancy, vice president of the financial services practice at J.D. Power.
"For years, bigger banks gave customer service lip service. Now they're putting their money where their mouth is."
The results — from the most recent quarterly round of polling, conducted late last year — suggest that the big banks are reaping measurable benefits from their considerable spending on consumer-facing technology.
That spending continues apace. Just last week, Charlotte-based Bank of America announced plans to triple annual spending on its mobile app. B of A, Chase and Wells Fargo are all planning rollouts of ATMs that will allow customers to use their smart phones, instead of debit cards, to withdraw cash.
When U.S. customers were asked by J.D. Power about banking fees and their face-to-face interactions with bankers, institutions with between $3 billion and $22 billion in deposits received the highest scores. But when it came to ATMs, online banking and mobile banking, the biggest banks held an edge.
The survey also found that the largest banks received the highest customer-satisfaction scores from young adults, while older generations gave stronger marks to smaller institutions. Likewise, consumers who are black, Asian and Latino — all groups that skew younger than whites — gave the highest ratings to the big banks.
Those findings make sense, given that millennials tend to adopt new technology more quickly than their parents and grandparents do.
Back in 2012, smaller banks held a sizable lead in the J.D. Power data over both regional banks (the group with $33 billion to $180 billion in deposits) and the biggest banks, which finished last in the survey. But the gap has been narrowing, and the big banks inched ahead in the most recent polling period.
The largest banks have been gaining ground across a range of customer-satisfaction realms, including bank fees, problem resolution, in-person transactions, online transactions, phone transactions and the mobile channel, according to J.D. Power.
Smaller banks, which remain more focused on attracting older and wealthier customers, are at risk of being left behind, Clancy argued. The banking industry's future growth will come disproportionately from the younger consumers who today are being wooed by the sector's behemoths, he said.
"I think it's a wake-up call for the mid-sized banks," Clancy said, referring to those in the $2 billion to $33 billion deposit range. "They risk becoming irrelevant."
Certain other measures suggest that despite their improving customer-satisfaction scores, the nation's biggest banks remain unpopular with the general public.
A January 2015 poll from a left-leaning group found that a majority of likely voters favored breaking up the big banks. And presidential candidates from both parties still see the megabanks as an easy target.
So how to square the improving customer-satisfaction scores for the biggest banks with their wider disrepute? Perhaps Americans are engaging a bit of compartmentalization: Break up the big banks. But don't mess with my mobile banking app.