J.D. Power and Associates Reports: Banking Customers Prefer to Bank Online More Than Interacting With Branch Tellers
J.D. Power and Associates Reports: Banking Customers Prefer to Bank Online More Than Interacting With Branch Tellers
WESTLAKE VILLAGE, Calif., Feb. 28 /PRNewswire/ -- With transaction times of nearly three times faster than interacting with a branch teller, online banking is the preferred transaction method among banking customers, according to the J.D. Power and Associates 2006 Retail Banking Satisfaction Study(SM) released today.
The inaugural study, which focuses on performance among the nation's
largest banks, analyzes the retail banking experience from two points of
view -- customer satisfaction and customer commitment.
The study finds that transactions have the greatest impact on a customer's
overall satisfaction with their bank. The average online transaction takes
just 2.8 minutes to complete, compared to 7.7 minutes of combined wait and
transaction time with a branch teller. Overall, in-person branch transactions
are conducted most frequently and are next highest in satisfaction, followed
by ATM and online transactions.
"Banks certainly face a challenge in today's extremely competitive market
in that customers crave the convenience of banking online, yet still also
require a personal touch," said Jeff Taylor, director of the banking practice
at J.D. Power and Associates. While customers appreciate the convenience of
banking online, those who visit the branch less often tend to demonstrate
lower satisfaction levels.
The study also finds that while bank products are viewed as a commodity to
many customers, products that once helped attract new customers, such as free
checking, are now widely offered and expected from customers. Currently
90 percent of banking customers indicate having free checking, and 94 percent
of banks offer free online banking and free debit cards.
"As it becomes increasingly difficult for banks to differentiate
themselves from their competitors, they constantly have to find opportunities
to be innovative in attracting the attention of potential customers," said
Taylor. "Online products and services represent a clear opportunity for banks
to differentiate themselves to potential customers."
The second dimension of the study, which analyzes customer commitment,
gives the industry a more complete picture of a customer's revenue potential
to the bank. Customer satisfaction is a major aspect influencing customer
commitment to the bank, in addition to brand image and a customer's propensity
toward loyalty.
The study finds a strong positive relationship between customer commitment
levels and the number of revenue-generating banking products a customer
utilizes, as well as the number of times a customer recommends the bank to
others. Customers with commitment levels in the top 25 percent use an average
of 3.3 banking services, compared to 2.5 for those in the bottom 25 percent.
Fifty-five percent of highly committed customers also have loans with their
primary bank and make 6.6 recommendations of the bank to others. Among those
with low commitment, just 31 percent have loans with the bank, and they
average fewer than one recommendation. Overall, the retail banking industry
enjoys a commitment level of 28 percent, compared to 13 percent, on average,
in other industries measured by J.D. Power and Associates.
Commerce Bank, Downey Savings and Loan and USAA are among banks that
record particularly high levels of both customer satisfaction and customer
commitment.
"We find that banks with strong brand image can have highly committed
customers, despite lower satisfaction scores, and vice versa," said Taylor.
"But overall, customer satisfaction and commitment are closely entwined.
Satisfaction is what banks can control, while brand image and commitment is
developed over time. Banks that understand and analyze this relationship are
better equipped to develop strategies to attract and retain customers."
The 2006 Retail Banking Satisfaction Study is based on responses from
12,904 households regarding their experiences with their primary banking
provider. The study was fielded in October 2005. Complete customer
satisfaction rankings of banks in the New York Metro area and the state of
California will be released in late March and late April, respectively.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an
ISO 9001-registered global marketing information services firm operating in
key business sectors including market research, forecasting, consulting,
training and customer satisfaction. The firm's quality and satisfaction
measurements are based on responses from millions of consumers annually.
J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global information
services provider meeting worldwide needs in the financial services, education
and business information markets through leading brands such as Standard &
Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates.
The Corporation has more than 290 offices in 38 countries. Sales in 2005 were
$6.0 billion. Additional information is available at
http://www.mcgraw-hill.com.
J.D. Power and Associates Media Relations Contacts:
John Tews Peter Dadlani
Director, Media Relations Supervisor, Media Relations
Troy, Mich. Westlake Village, Calif.
(248) 312-4119 (805) 418-8103
john.tews@jdpa.com peter.dadlani@jdpa.com
No advertising or other promotional use can be made of the information in
this release without the express prior written consent of J.D. Power and
Associates. http://www.jdpower.com
February 28, 2006 at 11:01 AM in Education | Permalink
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