Is a .bank Domain Right for Your Bank?

August 28, 2015
/   Voices

With the general availability of the .bank registry under way, more than 5,500 applications from over 2,200 banks have already taken place, according to fTLD Registry Services.

Can Smartphones Solve ATM Skimming

/   Insights

ATM skimming remains a big business for organized crime rings. According to a recent article in ATMMarketplace.com, card skimming accounted for more than $2 billion in losses. One new approach that banks are exploring...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Midsize banks (those with deposits between $2 billion and $33 billion) have traditionally been the leaders of customer satisfaction in the banking industry, but technology has advanced to the point where big banks and regional banks are closing the gap. These larger institutions—once the most vocally criticized by consumers during the recession—are making considerable improvements in personal interactions with customers, minimizing the occurrence of problems and strengthening brand perceptions.

The progress in these areas is clearly making a difference as banks have rebounded from low, post-recession customer satisfaction to an all-time high score of 790 (on a 1,000-point scale) in the J.D. Power 2015 U.S. Retail Banking Satisfaction StudySM.

  JD Power

 

Mobile and Digital Technology

Gains in overall customer satisfaction across big and regional bank segments have been driven by training employees to educate customers on the various transaction features that are available via mobile and digital channels. Both big banks and regional banks have gotten a jump on investing in this technology and have expanded the resulting advantages, giving them an important arena where they have consistently outperformed midsize banks over the last five years.

Midsize banks continue to lag behind in customer awareness of website features such as person-to-person electronic payments, personal financial management tools, online chat capabilities, and mobile functionality like check deposits and P2P payments. One policy in particular—charging customers for making mobile deposits—is being administered by midsize banks as opposed to big banks and regional banks. This policy can severely hinder adoption and usage of this key service that is driving satisfaction among consumers.

Midsize banks also trail in customer awareness of advanced ATM features, such as envelope-free deposits, itemized cash deposit receipts and image-enabled receipts. Midsize banks are also less likely than big banks and regional banks to offer e-receipts, multiple bill denominations and other newer ATM technologies.

Personal Customer Interactions

Midsize banks have long held a considerable advantage in personal interactions with customers, which has helped them maintain higher scores than larger banks in overall customer satisfaction; however, that advantage is now eroding. More big banks have started greeting customers by name and thanking them when they come to a branch. This brings the big bank customer experience at the branch closer to that of customers of midsize banks.

Avoiding Problems

Across the banking industry, overall satisfaction drops significantly when customers experience any sort of problem, which leads to lower share of deposits and lower customer retention rates. While midsize banks consistently excel at preventing problems, big banks and regional banks are steadily gaining traction—in fact, these larger institutions have lowered their incidence rate by more than 25 percent since 2013.

Can Midsize Banks Keep Pace?

Midsize banks clearly face a challenge from big and regional banks, and may suffer the same fate as independent retailers in other industries when larger retailers enter the market. There are several actions midsize banks can take to avoid that path, such as:

  • Acquiring the essential competitive intelligence found in third-party research to complement the bank’s own research;
  • Using this comprehensive collection of research to assess the bank’s current position compared to the competition and industry average;
  • Putting plans in place to improve the bank’s position in the areas that matter most to current and potential customers;
  • Continually measure customer satisfaction and manage business practices according to those metrics.

With many larger competitors already conducting these practices, midsize banks must take similar actions to avoid becoming dethroned as the leaders in retail banking customer satisfaction.


Jim Miller is the Director of Banking Services at J.D. Power.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp