Regional and Mid-Size Banks Increasingly Vulnerable to Large Bank Digital Transformation
COSTA MESA, Calif.: 27 June 2019 — With approximately 84% of retail bank customers saying they’ve had at least one digital interaction with their banks in the past three months1 and 71% of credit card customers interacting with their provider’s digital offerings2, online and mobile apps have become a critical component to overall customer experience. However, according to four studies of bank and credit card online and mobile app users, released today, J.D. Power finds that customer satisfaction levels with these digital channels have been strained by a surplus of new features that have made them more complex and difficult to use.
The studies—J.D. Power 2019 U.S. Banking Mobile App Satisfaction StudySM, 2019 U.S. Online Banking Satisfaction StudySM, 2019 U.S. Credit Card Mobile App Satisfaction StudySM and 2019 U.S. Online Credit Card Satisfaction Study—track overall customer satisfaction with banking and credit card providers’ digital offerings.
“Leading U.S. banks now have more than half of their customers interacting with them in a digitally centric manner,” said Bob Neuhaus, Vice President of Financial Services Intelligence at J.D. Power. “The trend is most pronounced among the largest national banks, such as Bank of America, which now counts 54% of its customers as digitally centric, meaning they do the bulk of their banking without setting foot in a branch. As the number of banking and credit card customers interacting with their providers’ digital channels continues to grow, these digital experiences will become an increasingly fundamental part of the overall brand. It is critical that banks and credit cards get the formula right, delivering the resources customers need while also designing apps to be user-friendly.
“Regional and mid-size banks are increasingly vulnerable to digital competition from large banks,” Neuhaus added. “Where large banks have half or more of their customers being digitally centric, regional and mid-size banks have a third or less of their customer base relying primarily on digital channels. This gives large banks both a cost advantage through reduced branch traffic and a growing satisfaction advantage as customers engage with expanding digital functionality.”
Following are some key findings of the 2019 studies:
- Bank mobile app satisfaction declines as complex features stump consumers: The overall customer satisfaction score for retail banking mobile apps is 853 (on a 1,000-point scale), down 15 points from 2018. Overall satisfaction for online banking also is 853. In both cases, customers were challenged in completely understanding all features. Complete customer understanding of the mobile app is associated with a 130-point improvement in overall satisfaction for banking apps and a 122-point improvement for online banking.
- Simplicity of credit card apps is appealing to consumers: The overall customer satisfaction score for credit card mobile apps is 872, down 3 points from last year. Online credit card satisfaction is 863. In both cases, customers report strong levels of understanding of features and offer high marks for mobile app appearance. The higher overall satisfaction scores for credit card mobile apps are attributable to a more tailored visual user experience that limits content to pertinent information and key functionality.
- Familiarity breeds loyalty: Banking mobile apps have the highest percentage of customers accessing the app 12 or more times a month. Higher usage of 8 or more times a month on either online or mobile platform substantially increases overall satisfaction. Overall, 69% of bank mobile app users say their banks mobile app is either a “somewhat important” or “very important” channel in preventing them from switching to a different bank.
- Personalization, curation of content become next frontier for digital channels: The bulk of spending and design activity in the banking and credit card online and mobile app space has been focused on creating rich feature sets and improving usability. As the technologies evolve, the focus needs to shift to personalization, creating a curated user experience that delivers both convenience and streamlined usability.
Huntington ranks highest in overall satisfaction for U.S. banking mobile apps, with a score of 875. Capital One (873) ranks second and Citibank (870) ranks third.
Huntington also ranks highest in overall satisfaction for U.S. online banking, with a score of 880. Regions Bank (874) ranks second and TD Bank (872) ranks third.
Discover ranks highest in overall satisfaction for U.S. credit card mobile apps, with a score of 890. American Express (889) ranks second. Bank of America (879) ranks third.
Discover also ranks highest in overall satisfaction for U.S. online credit card, with a score of 885. American Express (873) ranks second and Capital One (872) ranks third.
The 2019 U.S. Banking App Satisfaction, U.S. Online Banking Satisfaction, U.S. Credit Card App Satisfaction and U.S. Online Credit Card Satisfaction studies measure overall satisfaction with mobile banking and credit card applications based on five factors: ease of navigation; appearance; clarity of information; range of services; and availability of key information. The studies are based on responses from 17,424 retail bank and credit card customers nationwide. The studies were fielded in March-April 2019.
To learn more about these studies, visit https://www.jdpower.com/business/resource/us-banking-and-us-credit-card-mobile-app-satisfaction-studies.
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power has offices serving North America, South America, Asia Pacific and Europe.
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