Bank customers are more disappointed with retail banking fees, but that frustration has been largely offset by more positive experiences at branches and ATMs, according to a survey released Thursday by J.D. Power and Associates.
The research company's 2012 U.S. Retail Banking Satisfaction Study found that overall bank satisfaction held relatively flat, moving up just one point to 753 on a 1,000-point scale from a year ago. At the same time, customer satisfaction with bank fees fell to 609, down from 625 in 2011 and from 656 in 2010.
"It's a good news-bad news story," Michel Beird, director of banking services at J.D. Power, told American Banker in an interview on Wednesday. "No one's surprised about the decline in satisfaction on fees..What I took away as a surprise was that the industry overall improved in the in-person interaction, the branch experience and the ATM experience" scores.
For example, three-quarters of customers said they are greeted by a bank employee when they enter the bank, an increase from 68 percent in the 2010 study. Customer satisfaction with the reliability and ease of using ATM machines increased to 815 from 795 a year earlier.
Regional banks saw the biggest drop in satisfaction in the bank fees category, compared to both larger and smaller banks, says Beird.
"Convenience is a major mitigating factor for customers of the large banks, so if they aren't happy with fees [but] if there's a branch on every corner [customers think], 'I can live with that,'" he notes.
While some regional banks may still have a large branch network, they need to better convey the value of their business to consumers, according to J.D. Power.
"The challenge will be to better define their value proposition, especially around convenience. Until they do so, increases in fees will be difficult for customers to understand," Beird says.
Overall, regional bank satisfaction dropped one point to 759, from 760 a year earlier. Meanwhile, the score of the six largest banks improved two points to 743 from the prior year, while midsize banks' score rose four points to 781.
J.D. Power surveyed nearly 52,000 consumers in January and February of this year. It classified the six biggest financial institutions by deposits as "large banks." Regional banks are defined as those with between $33 billion and $180 billion in deposits, and midsize banks, the smallest institutions considered for the survey, are defined as those with between $2 billion and $33 billion in deposits.