U.S. consumers were more satisfied with big banks this year, a new J.D. Power report found, but they also moved some of their money away and got financial advice elsewhere.
The shift happened primarily among more affluent customers who felt good about their finances. If big banks continue ceding that territory, the trend for those banks is a "little scary," said Paul McAdam, J.D. Power's senior director of banking and payments intelligence.
"Once a customer starts to trust another brand enough to receive advice, then that's when we can start to see momentum really shift," McAdam said. "That's the danger."
Big-bank customers who had secondary accounts at wealth management firms or online financial institutions rose from 44% in 2022 to 50% this year, according to J.D. Power's annual U.S. National Banking Satisfaction Study. The study covers nine U.S. banks with at least $300 billion in domestic deposits and 200 branches.
Those banks got better scores from their customers this year, with overall satisfaction rising five points from last year to 653 in 2023. Scores are based on a 1,000-point scale.
Capital One Financial led the way with a score of 706, which
McLean, Virginia-based Capital One also scored well for the rates it pays to its depositors, he added. As interest rates jumped from near zero to a 22-year high, Capital One and certain other banks that offer high-yielding accounts gained depositors who were seeking more interest on their cash.
Other big banks
While interest rates were more important to consumers this year than they were in 2022, McAdam said there are
Banks that offer easy-to-understand credit cards and reward programs, as well as easy-to-use mobile and digital experiences, did better in retaining customers. Making it quick and simple to open a new account also helped.
Those "extra steps to develop engagement" matter as banks seek to retain deposits, McAdam said.
There is far more to keeping deposits than just offering high rates, said Adam Stockton, who consults with banks on retail deposit strategies at Curinos. Customers want easy tools that help them save for different purposes, keep track of how close they are to meeting their goals and perhaps reward them for reaching an objective, Stockton said.
"Most banks would like to be competing on more than just rates," Stockton said. "And fundamentally, most consumers want more than just rates."
Even so, he added, wide gaps in the rates offered by different banks became evident as the Federal Reserve raised rates aggressively.
"If your primary bank is only offering you 0.03% on your savings account, and you could be getting 4% or 5% at an internet bank, then suddenly it's a very different matter," Stockton said.
Besides Capital One, JPMorgan Chase and TD Bank were the only two banks that achieved J.D. Power satisfaction scores above the 653 average.
Wells Fargo's score was the second lowest at 625. The San Francisco-based bank remains subject to regulatory penalties after a sales practices scandal that damaged its reputation. CEO Charlie Scharf, who joined the company in late 2019, has focused on overhauling the bank and fixing its regulatory troubles.
In a statement, Wells Fargo said survey results from J.D. Power and others "validate our urgency and commitment to do better where needed.
"All that we do is guided by listening to our customers to improve," the company said. "We gather feedback and measure customer experience through many channels and metrics — J.D. Power being one of them. Creating better experiences for our customers is our top priority, and we are committed to driving constant progress in this area."
In last place was Truist Financial, though its score rose to 624 from 605 last year. The Charlotte, North Carolina-based company endured
Truist did not respond to a request for comment.
The J.D. Power study, which was conducted in August and September, included responses from 12,938 retail banking customers.
Celia Karam, Capital One's retail bank president, said in a statement that the company is "proud of the hard work we've done to empower more than 100 million customers to feel confident in their financial literacy and well-being, and look forward to continuing to deliver innovation that drives real change."
