Online-only banks that offer more personalized customer service get higher satisfaction ratings than competitors that provide less individualized attention, according to a new survey by the research firm J.D. Power.
The firm’s 2022 U.S. Direct Banking Satisfaction Study, which relied on polling of nearly 8,000 users of direct banking, identified responsive customer support and user-friendly interfaces as key aspects of personalization.
The results also show that “the basics still matter,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power.
“The efficiency of moving money, transferring funds, and funds availability is highly important to consumers,” he said. “How banks handle those types of communication with the customers says a lot about how these brands perform.”
Direct banks, which have fewer operating expenses than branch-based retail banks, have sought to capture market share by passing the benefits of a lower cost structure along to their customers, McAdam said. Online-only customers now account for 27% of the banking market, he noted.
“Direct banks have a clean value proposition that customers see and appreciate,” McAdam said. “They are gaining market share, and this market represents the future.”
In the checking account rankings, Charles Schwab Bank and Discover Bank tied for first place with a score of 715 out of a possible 1,000.
Charles Schwab received top marks for customers’ level of trust, for helping customers easily move money between accounts, and for helping users manage their accounts through the bank’s website. Discover received high scores for its customer service and its mobile app, and for accounts that help customers to grow their money.
“The direct bank’s value proposition is based on the fact that the technology is solid and a consumer is able to easily interact and manage their finances,” Ram Subramanian, chief marketing officer of Discover’s deposits business, said in an interview.
Back in 2019, Discover Bank, a unit of Riverwoods, Illinois-based Discover Financial Services, eliminated most fees on its consumer deposit accounts. The fees eradicated were for having insufficient funds to complete a transaction, falling below a minimum balance requirement, stopping payment on a check and making more than six withdrawals in a month from a savings or money market account.
Discover Bank also offers cashback points for debit card transactions.
Ally Bank finished third in the checking account rankings, followed by Capital One Bank, E-Trade Bank, TIAA Bank, Varo Bank, CIT Bank and Axos Bank.
Factors that drove customer satisfaction among checking account holders included: the ease of obtaining customer service, both by phone and online channels, and the competence of that service; the ease and security of moving money and making purchases; the consistency, quality and relevance of communications; the financial value provided through rates, rewards and reduced fees; and the customer’s trust in the bank.
In the savings account rankings, American Express finished ahead of Discover and Schwab. Amex scored highest for factors that included the ease of moving a customer’s money and for helping accounts grow.
Next in the savings account rankings was Ally, followed by Capital One, Marcus by Goldman Sachs, Varo, E-Trade, TIAA, Barclays, Synchrony Bank, Axos Bank, Citibank, CIT Bank and Sallie Mae Bank.
The factors that drove customer satisfaction among savings account holders were similar to those among checking account holders, but interest rates played a larger role in influencing overall satisfaction, according to J.D. Power.
