Research from US banking clients suggests that branches are still having a significant effect on customer satisfaction across all customer age groups.
That’s the finding of the latest J.D. Power US Retail Banking Satisfaction Study.
According to the authors, the study finds that overall retail bank satisfaction is significantly higher among customers who have visited a branch within the past 12 months compared to those who have only used digital channels. Within the closely watched millennial age group (those born from 1982-1994), satisfaction is highest when bank customers use both branch and digital banking channels.
“There is no question that banks need to get the digital experience right in order to attract and retain customers, however, the branch continues to play an important part of the overall customer experience,” said Jim Miller, senior director of banking at J.D. Power.
“The trend is particularly noteworthy among millennials who represent the future of banking, and consistently demonstrate that overall satisfaction is higher among customers who use both the branch and mobile banking. Banks can’t choose between the two channels; rather, they must focus on how the two work together.”
Among the key findings;
- Rise of retail banking omnivore: More customers than ever are using mobile banking (49 per cent of millennials, 31 per cent of Gen X and 16 per cent of Boomers). Despite this widespread adoption of the digital channel, 71 per cent of all bank customers visited the branch an average of 14 times over the past year. Among millennials, 71 per cent used the branch, averaging 11 visits in the past year.
- Branches still matter: Across all customers in the study, overall satisfaction among those who visited a bank branch within the past 12 months is 27 index points higher (on a 1,000-point scale) than among those who did not visit a branch (824 vs. 797, respectively). Among millennials, overall satisfaction among those who used the branch and mobile is 20 index points higher than among those who used the branch only and 37 points higher than among those who used mobile only. Additionally, 78 per cent of new accounts are opened in the branch.
- Mobile payments pose disruptive threat: Customer satisfaction, overall brand image and retention metrics are higher among customers who have a mobile payment service linked to their bank account. The trend is most pronounced among the emerging affluent segment of millennial customers with incomes above $80,000, among whom 64 per cent currently have mobile payment services linked to their accounts.
- Digital problem resolution is key: Unsuccessful problem resolution is highly correlated with low levels of satisfaction and high levels of customer attrition. Overall satisfaction among customers whose problem was not resolved is 564 points. Further, only 20 per cent of these customers say they were likely to reuse that bank. When the problem is resolved, satisfaction scores jump to 812 and loyalty increases to 58 per cent. While the branch has been the traditional channel for handling problems, younger customers prefer to resolve problems online or via social media.
“It’s becoming increasingly clear that banks that can get the balance right between digital and personal interactions will be those that build the strongest customer relationships,” Miller said.
“The millennial generation is a great source of insight into the trend, but it’s one that’s larger than any single generation: all customers want choice. They want to choose when, where and how they conduct their banking, and banks must continue to meet that need by offering consistent, tailored experiences regardless of the channel.”