• by Tanya Gazdik , April 30, 2018

The gap in satisfaction between digital-centric and branch-dependent customers cuts across all generations of retail bank customers, but it is most pronounced among Millennials and Gen X, bucking the conventional wisdom that younger banking customers do not like to use branches, according to a study.

Banks are having a lot of trouble keep digital customers happy and managing the various channels customers use to interact with their bank, according to J.D. Power’s 2018 U.S. Retail Banking Satisfaction Study.

Overall satisfaction is lowest among retail bank customers who exclusively used online or mobile banking channels during the past three months. Customers who exclusively used a branch are slightly more satisfied.

The segment with the highest level of overall satisfaction is branch-dependent digital customers, the group that used the branch two or more times in the past three months and also used online or mobile banking. This group is followed by digital-centric branch-using customers (808), who used the branch once in the past three months and used online or mobile banking.

Big banks have the largest concentration of digital-centric customers (47%). Within the big and regional bank segments, Capital One and Bank of America have the highest percentages of digital-centric customers (55% and 53%, respectively), giving them a significant lead in digital transformation.

The lower satisfaction scores found among digital-only customers are largely driven by weaker performance across three factors in the study: communication and advice; products and fees; and new account opening.

A full 28% of retail bank customers are now digital-only, according to the study.

The digitalization of banking has great promise to cut costs, but at the moment, it looks like it comes at the expense of making customers happy, says Paul McAdam, senior director of the banking practice at J.D. Power.

The study measures customer satisfaction with banks in 11 regions of the United States. The scores reflect satisfaction of the entire retail banking customer bases of these banks, representing a broader group of customers than just the branch-dependent and digital-centric segments. 

The J.D. Power award recipients with the highest retail banking customer satisfaction scores by region are California Region: U.S. Bank;  Florida Region: TD Bank; Mid-Atlantic Region: Northwest Bank; Midwest Region: First National Bank of Omaha; New England Region: Bangor Savings Bank; North Central Region: City National Bank (W.V.);  Northwest Region: Banner Bank; South Central Region: Trustmark National Bank; Southeast Region: United Community Bank; Southwest Region: MidFirst Bank and Texas Region: Frost Bank.