December 14 2011|05.00 AM PST

What Makes Banking Customers Happy

Category: Financial InstitutionsTags: , ,

by Alex Gutow on December 14, 2011


The banking industry overall has taken huge hits in customer loyalty and satisfaction over the years. What will it take to restore the reputation of banks? What will it take to nurture loyalty and satisfaction of its customers? The answer is quite simple, and actually a basic tenet of business practice: serve the customer and his or her needs, and you will sow loyalty and satisfaction.

The recent 2011 U.S. Retail Banking Satisfaction Study conducted by J.D. Power and Associates reported that banking customers want clean facilities with good lighting. They also want friendly and knowledgeable customer service representatives. Another desire of customers was restructuring of fees so that they are fair, consistent and understandable. And last but not least, customers want the bank to offer services that fit into their mobile, technologically oriented lifestyle.

The current wave of social networking and the technology boom offers banks another way to increase customer happiness. Mobile applications and connections through social media allow banking when the customer wants and needs it. Chase and Wells Fargo managed to reduce customer attrition during mergers by conducting extensive user tests and focusing on customers needs as they overhauled their websites and online services. Citibank claimed first place for usability of their website, reinforcing the notion that fast, accurate and convenient are key words when implementing online services. Bank of America held many first place positions in a variety of categories reflecting positive results for their investments into online security and presence.

Although all of the major banks ended up removing the proposed monthly fee on debit cards, it still left a negative taste with many customers – causing them to take Senator Durbin’s advice to “vote with their feet and get the heck out of that bank.” To help counter the negativity built both from these proposed fees as well as various fees and charges that have been added over the past few years, banks should take a note from the Customer Satisfaction Survey and restructure their fees so that they are consistent and transparent to the customer. However, customers will only stand so many fees.

Rather than adding new fees every time revenue is diminished, banks should look for new ways to increase revenue without negatively affecting the customer. One such way is through merchant-funded incentives, which Javelin estimates will lead to $8.3B in new revenue annually. This new type of reward program uses transactional data to offer customers deals and discounts for where they already shop. Platforms like StatementRewards allow both banks and customers to benefit, without any new fees or confusing loyalty programs.

Customers also appreciate transparency from their banks. The recent mortgage crisis and housing bust are frequently associated with banks being less than transparent, leaving everyone vulnerable. An overwhelming majority, 83%, of those surveyed by the Pew Charitable Trust, wants more information on fees and overdraft protection offered by banks. Customers want a bank they can trust, and one will answer their questions with a helpful and cheery attitude. This sentiment extends across political lines as 62% – 81% of Democrats, Republicans, Independents, and Tea Party members surveyed share the opinion that change is needed in transparency and disclosure of fees. Customers want to feel that they are cared about and are working with someone who is looking out for their best interests, as a teacher, a friend, a neighbor and a banker.

The path to customer happiness is one that can be successfully navigated with common sense and customer service. It is possible to not only restore the customer-banker relationship, but to improve and update it for the future.

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