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WESTLAKE VILLAGE, Calif.-Is the window of opportunity to win over large numbers of dissatisfied bank customers closing on credit unions?

After experiencing a decline in customer satisfaction and image scores in 2010, banks are making a comeback, according to the latest J.D. Power and Associates study.

The 2011 J.D. Power and Associates Retail Banking Satisfaction Study shows the bank industry customer satisfaction average improved four index points (752 on a 1,000-point scale) over the 2010 survey (see related chart at right). Small banks improved from 779 to 782, medium-size banks went from 759 to 764, and the biggest financial institutions improved from 741 to 746.

The large banks have rebounded to about the levels they experienced in 2009 after seeing a marked decline last year, explained Cindy Bestard, research director of banking services practice, during a recent Bankerstuff webinar. "It's not just the small banks coming up in customer satisfaction."

Some of the most significant reasons for banks bouncing back are improvements in facilities and product offering satisfaction, Bestard said. "Behind these improvements are effective communication about products, increases in interest rates, and improvement in branch appearance, hours, and wait time."

Problem resolution scores improved this year by five index points (586). "So we are seeing an improvement here for the first time in the last three years."


Fees A Big Negative

Those gains helped counteract the sharp 31-point decline (625) in fee satisfaction. The decline in fee satisfaction occurred throughout all bank sizes, noted Bestard. "With the largest and small banks seeing the biggest declines year over year. That was attributed a lot to a lack of understanding by customers of bank fee structures. About 20% to 25% of bank customers have a complete understanding of fees they are charged."

Moreover, banks' brand image is on the rise (5.58) after taking a big hit in 2010, when that figure dropped from 5.77 to 5.43 on a seven-point scale. Large banks had experienced the biggest decline in last year's study, when they fell to 5.31 from 5.73, and improved this year to 5.44. Medium-size banks are almost back to image levels experienced in the 2009 survey (5.92), while small banks have improved to 6.11, which is above 2009 levels. The percentage of customers saying they definitely will not switch banks is rising slightly (34% to 36%) after a steep decline in 2010.

Data for the 2011 study was collected online during January-51,850 surveys profiled financial institutions across 11 U.S. regions

For info: www.jdpower.com

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