The rich really are different than the rest of the population when it comes to their high expectations for customer service and personal attention. Although bankers, of all people, should understand that, they're doing a poor job of delivering, a new report says.
In fact, affluent customers were the least-satisfied segment of the groups surveyed, despite banks' efforts to beef up wealth management, the newly released 2014 J.D. Power U.S. Retail Banking Satisfaction Study says.
Overall, the trend was positive, although banks received mixed results in several areas. In aggregate, customer satisfaction improved by 22 points, to 785, on J.D. Power's proprietary 1,000-point scale. Among this year's positives: service fees, long the bane of banks' existence, seem to be gaining greater customer acceptance.
In terms of serving the affluent, banks appear to be falling down due to a failure to provide the sorts of experiences the wealthy are accustomed to in luxury hotels and first-class airline cabins, according to Jim Miller, J.D. Power's director of banking services. That failure is costing banks, too, because in its absence they're failing to boost deposits and improve liquidity, he adds.
"As an industry, we haven't done a good job of differentiating services," Miller says. As an example, he notes that in most branches "You can't cut to the front of the line," even if you're among the largest customers.
The affluent "have higher expectations and they don't always feel like they're treated any better or any differently than those with less," Miller says.
The majority of bank tellers probably don't know how to open a trust account, a service that would typically be requested by an affluent customer, Miller says. Banks tend to score better when they assign a personal banker to a wealthy client.
"Most people are generally not equipped to deal with the needs of the affluent," Miller says.
Separately, the industry group that J.D. Power defines as midsize banks--those with $2 billion to $33 billion in deposits--fell behind others. The midsize institutions are getting squeezed between smaller banks' superior customer service and their biggest rivals.
They appear to be struggling especially with minorities and millennials, who are defined as customers born between 1977 and 1995.
"Midsized banks have owned the in-branch personal experience, but that gap seems to have disappeared" with minorities and millennials, Miller says. The report did not provide enough data for J.D. Power to draw firm conclusions about the reasons these groups are dissatisfied, he said.
Last year's report found that banks were doing a better job of explaining their fee structures, which helped with overall customer service. That trend continued this year, with banks increasing their overall fee satisfaction scores, Miller says.
To some extent the gains may reflect societal changes. Airlines bag fees "outraged everyone at the time they were announced" by the industry, Miller says. "Now, nobody likes bag fees, but they're more resigned" to them. The same thing seems to be happening with bank fees.
J.D. Power organizes the results of its survey into 11 geographic regions and does not collect full results on a national scale. For each region, it ranks 10 institutions based on several factors, including customer assessments of each bank's product offerings, fees and the quality of branch facilities.
Several institutions retained their positions as their region's top-ranked banks. Among them: $14 billion-asset Arvest Bank in the South Central and Southwest regions; $24 billion-asset Cullen/Frost Bankers (CFR), tops in Texas; and the Dutch-owned Rabobank, which was tops in California this year and last.