WESTLAKE VILLAGE, Calif. — Higher fees is the leading reason bank customers have switched banks over the past 12 months, according to a new study by J.D. Power and Associates. J.D. Power's 2009 Retail Banking Satisfaction Study also found that "customer commitment to retail banks continues to fade, driven primarily by declines in both satisfaction and brand image."
The study, now in its fourth year, examined banks across six factors: transactions, account statements, account initiation/product offerings, convenience, fees and problem resolution. It found that one-third of those who had switched banks over the previous 12 months did so because of increased fees, in particular, overdraft fees. Among the other findings:
- 35% of customers are highly committed to their retail bank in 2009, compared with 37% in 2008 and 41% in 2007. "This trend is especially troubling to banks because, on average, highly committed customers use more products, give more referrals and are much less likely to switch to another bank compared with customers with lower commitment levels," the study states.
- More troubling for banks: those reporting they are becoming less committed are customers with deposit balances that are 15% higher than average.
- Overall customer satisfaction with the retail banking experience has declined slightly, dropping from 737 points on a 1,000-point scale in 2008 to 734 in 2009.
- The decline in satisfaction is primarily driven by an increase in problems experienced among customers, particularly regarding issues with fees, J.D. Power said. Over the past 12 months, 15% of customers reported a problem with fees, which is up from 12% in 2007. As such, customers report lower satisfaction levels in the area of fees in 2009-dropping 19 points compared with 2008.
- Customer perceptions of banks-and the accompanying brand image-has declined for a third consecutive year.
- Despite the challenging financial market, some banks have achieved high commitment levels from more than 50% of their customers, which is well above the industry average of 35%.
The bank rated highest by customers with a score of 815 (out of 1,000) was Arvest Bank.The 2009 Retail Banking Satisfaction Study is based on responses from 28,570 households regarding their experiences with their primary banking provider. The study was fielded in January of 2009.
