Report: Customer Satisfaction with Direct Banking Drops

Overall customer satisfaction with digital banking declined this year as banks were forced to move operations online due to the COVID-19 pandemic, according to the 2021 U.S. Direct Banking Satisfaction Study by Troy’s J.D. Power.
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Customer satisfaction with digital banking declined as banks moved operations online due to COVID-19. // Stock photo

Overall customer satisfaction with digital banking declined this year as banks were forced to move operations online due to the COVID-19 pandemic, according to the 2021 U.S. Direct Banking Satisfaction Study by Troy’s J.D. Power.

According to the study, overall satisfaction for banks this year fell to 852 out of 1,000 — down 12 points from last year, according to the study. The largest declines in satisfaction were found in customers who reported being worse off financially than they were a year ago and those with deposit-only accounts.

Digital banking has been on rise even before the pandemic. The percentage of traditional retail bank customers who use online and mobile channels only — with no branch use — increased to 41 percent from 28 percent in 2018, the J.D. Power 2021 Retail Banking Study found.

But as banks were required to temporarily close many brick-and-mortar branches with pandemic-linked shutdowns last year, they attempted to shift the majority of offerings to their digital platforms. Though these platforms were utilized more, consumers reported lower levels of satisfaction with them, specifically pointing to shortcomings in clarity of information on digital platforms, navigation tools, and platforms appearance.

Customers were also less likely to say their banks’ websites provided enough information to answer all of their questions, an issue exacerbated by that fact that they had limited opportunities to speak to employees with branches closed.

Though the pandemic highlighted already-present issues within online banking platforms, customers did give higher approval when banks showed flexibility during the pandemic. Customers whose banks waived fees during the pandemic reported noticeably higher satisfaction levels — a difference from 902 to 701— than those whose banks did not.

Across the board, the pandemic pushed direct banks, which typically report higher consumer satisfaction than traditional ones, to reconsider their online offerings to better customer happiness.

“It may come as a surprise to see such a sharp decline in overall customer satisfaction this year — at a time when digital banking has prominently been in the spotlight,” says John Cabell, director of wealth and lending intelligence at J.D. Power. “Digging deeper into the data, the primary drivers of this year-over-year decline are macroeconomic. Looking at the core functionality of direct banks — primarily the digital and mobile channel usage — they continue to set the pace for the industry, but study results also highlight areas where there is room for improvement.”

Charles Schwab Bank ranked the highest in overall satisfaction for a third consecutive year with a score of 865, with Discover Bank a close second at 862. The industry average is 852.

The U.S. Direct Banking Satisfaction Study measures overall satisfaction with direct banks based on channel activities, communication, products and fees, new account opening, and problem resolution. Now in its fifth year, the study is based on responses from 3,212 direct bank customers nationwide. The study ran from December 2020 to January 2021.

J.D. Power is a consumer insights company.

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