Many consumers stay with their banks for years unless persuaded by other bank incentives
AI and online-only perks aren't what some bank customers wants, but satisfaction with brick-and-mortar banks is declining.
Consumers tend to stick with their banks, but some can’t turn down incentives that certain online-only banks offer. More than one in three consumers in a Vericast study said they’ve had the same bank longer than they’ve had their current romantic partner.
Customers appear to stick with the same bank out of convenience more than anything. About 46% of those surveyed said they would be open to switching to other financial institutions if those institutions could address their specific financial needs.
When seeking new banks, customers are mainly interested in money-earning incentives. Two major motivators customers stated for potentially switching banks included seeking better rates and earning cash back for opening a new account. Consumers also appreciate the idea of checking account offers.
"Consumers want to feel the love directly from their FI [financial institution]," said Lisa Nicholas, Vericast senior vice president of FI marketing products and strategy. "Perpetual changes in consumer behavior and mindset mean FIs need to be more tuned in than ever to the relationship they have with them. From understanding their financial goals to providing offers that support their needs, FIs must be focused on authentic and personalized connections with customers to bring them new and increased value."
ATM locations were also important when considering customer satisfaction with banks. Nearly one in three survey respondents said having convenient ATM locations and a large network was important to them when considering a bank.
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Online-only banks have been a beacon of earnings for many customers. They often have low fees and sign-up incentives, making them attractive options. However, over the last year, customer satisfaction with online-only banks has fallen, a J.D. Power report found.
Although satisfaction with online-only banks is still higher than traditional banks, online-only checking account satisfaction dropped by 27 points from 2023. Online-only savings accounts also dropped, but by just eight points.
"Despite significant increases in deposit interest rates for both checking and savings accounts — but decreases in the proportion of customers who had to pay a fee or experienced a problem — overall satisfaction still declined," said Paul McAdam, J.D. Power senior director of banking and payments intelligence. "That’s because customers who experienced problems had a very tough time resolving them in a timely manner, causing satisfaction with the ease of problem resolution to decline sharply."
Online banks also lacked in visual appeal and design upkeep in the last year, causing some consumers to consider switching. Plus, many customers don’t appreciate the small range of services offered by some online-only banks.
The three banks ranked the highest in satisfaction for their checking accounts include Charles Schwab, Ally Bank and Capital One, respectively, J.D. Power reported. Savings account providers with the highest rankings include Goldman Sachs, Ally Bank and Capital One.
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AI is a divisive topic in many industries, banking included. How and when it could make the lives of banking customers easier remains up for debate. Customers are torn, with 28% believing AI can help their banking experience, according to a J.D. Power report.
An additional 17% think AI will make their lives worse, followed by a close 24% that haven’t fully formed an opinion on AI in the fintech world.
Using AI on a regular basis, or at least being familiar with it, seems to help customers value the technology. Almost half of those with AI experience said it would likely help make their lives better compared to just 6% of those not familiar with AI.
Customers on both sides reported that they could set aside any negative feelings toward AI if the tools it created helped make an immediate impact on their finances.
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