JD Powers recently put out a press release about the findings of their most recent retail banking satisfaction survey. Their annual customer satisfaction survey has been conducted for the past 11 years, and according to them is “most in-depth survey of the U.S. retail banking industry, with more than 75,000 customers evaluating various aspects of their banking experience.”
While satisfaction at both big banks and midsize banks had been rising for the past few years, this past year saw a significant change – customer satisfaction with Midsize banks dropped for the first time since 2010.
One of the key findings in the study was that the big banks improved satisfaction by improving their technology. The report also says that the big banks have been winning in growth segments, namely millennial. While not called out in the press release, we believe that there is a strong connection between improving their technology and winning the millennial customer.
Jim Miller, senior director of banking at J.D. Power, sounds the alarm for midsize banks in his quote;
“Based on their current trajectory, the country’s largest retail banking institutions are expected to achieve a substantial lead in overall customer satisfaction vs. Midsize and Regional banks by 2020. This trend puts Midsize banks most at risk. Regulatory costs have made it difficult for them to invest in strategies to compete with larger rivals, and unless they take proactive steps to change course, we expect this to result in consolidation in the Midsize bank marketplace.”
What can the Midsize and Regional banks do to attract more customers and keep customers coming back? There is no reason for banks to fall behind. One fact we hear often in the banking industry is that defaults are much less if the borrower lives within 10 miles of a bank location – local knowledge and relationships makes a difference. New technologies and the rise of alternative lending, along with the valuable local knowledge and relationships midsize and regional banks have, is an advantage that should not be wasted. Agile new platforms and strategies such as marketplace lending and peer-to-peer lending, supported by cloud technology, will help these banks stay competitive. Download this white paper if you are interested in learning more.