Customers of varying ages and financial health status want banks to help them improve their financial situation, but satisfaction with advice and guidance provided by national and regional banks has dropped significantly over the past year, according to a new study from J.D. Power.
The J.D. Power 2022 U.S. Retail Banking Advice Satisfaction Study found that customer satisfaction with the advice and guidance provided by national and regional banks was 30 points lower on a 1,000-point scale compared to a year ago.
“The past few years have been tough on consumers in general, and many of the financial pressures they face may not subside all that quickly,” Jennifer White, senior director for banking and payments intelligence at J.D. Power, said in a statement. “The data make it crystal clear: retail bank customers want guidance, but many aren’t receiving it.”
The study was conducted in January and February and included responses of 5,177 U.S. retail bank customers who received any advice or guidance from their primary bank regarding products, services or other financial needs during the previous 12 months.
The study found that 59 percent of retail bank customers expect their financial institutions to help them improve their financial health. But overall satisfaction with the advice and guidance provided by retail banks was rated 601 on a 1,000-point, a significant 30-point decline from 2021, J.D. Power said.
While the downward movement was seen across all attributes of satisfaction, J.D. Power said, the largest declines were in customer perceptions of the frequency of advice or guidance about financial products or needs, as well as the quality of the advice or guidance.
The retail bank customers who said financial firms should help them improve their financial situation came from different age groups and personal financial health categories, J.D. Power said.
Using data from respondents including spending and savings ratio, credit worthiness and safety-net items such as insurance coverage, J.D. Power created a measure of customer financial health, ranging from healthy to vulnerable. Of the consumers who received advice, 47 percent were considered financially healthy and 28 percent were considered vulnerable. Another 16 percent were overextended and 9 percent were financially stressed.
Even when banks do provide advice, customers don’t always recall the specific content, J.D. Power said. The study found that 63 percent of customers said they received advice two or more times, down from 70 percent in 2021. Advice fell into several categories, including financial planning; investment and retirement; savings, tips and information; or banking services. All categories of advice declined from 2021, J.D. Power said, except the category of borrowing and housing, with advice related to savings, tips and information declining the most.
“The tools banks have at their disposal aren’t always being used or, when they are, they are not used effectively,” White said. “Neither banks nor their customers benefit from this dynamic. If banks don’t begin to make more progress in making advice content resonate, they could be facing significant attrition risk.”
When customers could recall two or more instances of advice, overall satisfaction increased 52 points, the study found. And advice tailored to meet customers’ specific needs led to even higher satisfaction. Satisfaction for customers who received personalized advice one time was 697 compared to 583 for those who received advice on five or more topics that was not personalized.
“[A] cookie-cutter approach will not suffice,” J.D. Power said. “Advice and guidance must be personalized to the specific customer, delivered to the right person at the right time.”
Capital One ranked highest in the study with a score of 629, followed by Citibank with a score of 620 and Bank of America at 618.
