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Wednesday, July 27th, 2016

Bank Satisfaction Falls

Decrease in Bank Satisfaction could Benefit Vancouver Mortgage Brokers

Customers became less satisfied this year with big and  mid-sized banks in Canada, according to a report released by J.D. Power and Associates. A large part of this is due to a decrease in satisfaction relating to fees. The study does not highlight satisfaction related to Vancouver mortgage brokers.

The increased dissatisfaction correlates strongly with advocacy and loyalty metrics, both of which have been falling year-over-year. The advocacy metric is determined by the percentage of clients who according to a poll,  said they “definitely would” recommend the bank they use to friends and family; this metric fell by 5%.  Customer loyalty, determined by the percentage of clients who in a poll indicated they “definitely would” continue using their bank in the future, fell by 4%, year-over-year.

Brand image perceptions of banks have also deteriorated, contributing to the decrease in advocacy, loyalty and satisfaction. Brand image has been affected by perceived declines in financial stability and reliability.

A fall in fee satisfaction is primarily attributed to several changes in fee structures, affecting approximately 27% of bank clients this year, compared to only 17% in the prior year. On a 1000 point scale, this resulted in a 25 point decrease from 2011, putting the current rating at 592 points.  Such falling ratings may be a boon to Vancouver mortgage brokers and other small institutions offering financial services.

Frustration with fee structure changes is part of the problem, but confusion regarding the reasons for changes has also contributed to a lower level of satisfaction, says Lubo Li,  a senior financial services director at J.D. Power and Associates.  In such a situation, banks might be wise to proactively contact customers and ensure they understand the changes as well as the reasons for their occurrence.

During the past 3 years, usage of online banking has increased to 86%, up from 80% in the year 2010.
The use of online banking has now exceeded the use of bank branches which has continued to fall year-over-year for the last 3 years. Banking via mobile phones has also been increasing since 2010.

Now that digital banking has overtaken traditional branch-based banking, it has begun to become a differentiator among bank brands. It has helped the highest performers among the Big 5 banks as well as the mid-sized banks. It has contributed to some mid-sized banks outperforming banks in the Big 5 when it comes to overall customer satisfaction,  says Li.

For this reason, it’s critical for banks and all other financial service providers including Vancouver mortgage brokers to ensure their websites meet customers needs. In spite of this, online customer satisfaction decreased by 8 points when comparing 2012 to 2011. Difficulties related to navigation and the lack of a full range of services offered online contribute to this drop.

But regardless of the shift from bank branches to digital usage, branches continue to be a large driver in customer satisfaction. For this reason, it’s important for banks to focus on making sure that representatives and tellers are both courteous to clients, as well as prepared to deal with all of their needs.  Complimentary services like beverages, reading materials and television may be a cost-effective way to increase branch satisfaction. This goes for  banks, Vancouver mortgage brokers and all other financial institutions.

The study performed by J.D. Power and Associates surveyed approximately 12,000 customers who use banks and credit unions for personal banking. The individuals in the study were surveyed during February and May of 2012.

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