The Digital Divide: Can Small Banks Keep Pace?

Big banks have always struggled to connect with customers at a personal level and this often was reflected in surveys about customer service where regional and smaller institutions often received higher marks than their larger competitors. The Financial Brand, reporting on a large survey recently conducted by JD Power, has found that the largest six banks are finally scoring better with their customers and they are accomplishing this primarily through better technology:

According to the 2016 U.S. Retail Banking Customer Satisfaction Study published by J.D. Power, the six largest banks (Bank of America, Citigroup, JPMorgan Chase, PNC Financial, U.S. Bancorp and Wells Fargo) have taken the lead in customer satisfaction for the first time ever.

Continued heavy investment in digital channels by the biggest banks was rewarded in this most recent survey, however, with the top six banks showing significant improvements in all digital categories. The Big Banks scored highest in online satisfaction (839), mobile (858) and ATM (841) interactions in the most recent study.

The details of the survey reveal that the largest banks are doing best with Millennials, emerging affluent and minorities, which bodes well for future growth.

While the big banks have outpaced small and mid-sized banks by improving satisfaction with every generational and income category of consumer (as shown below), they still lag small and mid-sized banks with Boomers, Pre-Boomers and the affluent consumer. The real appeal of the biggest banks is with Millennials, emerging affluent and minorities (specifically black/African-American, Latino/Hispanic and Asian/Asian-American).

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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