Consumer Loyalty to Banks Declines

JD Power’s new report has revealed consumer trust in retail banks has continued to decline over the past two years, which has led to decreased customer loyalty.

The ‘US Retail Banking Satisfaction Study’ found that customer attrition is a concern for banks as 8% of customers switched from their primary bank in 2023, which was an increase from 5% in 2018.

Low levels of customer loyalty to banks looks set to continue as 13% of customers reported they “probably will” or “definitely will” switch banks in the next 12 months.

Meanwhile, fewer than half (46%) of retail bank customers reported they are certain that they will remain with their current bank in the next year.

Of those who are likely to change their bank, 29% said it was because they were either charged too much or high fees for products and services while 26% said it was due to poor service experience.

According to the report, consumer trust in banks has also decreased due to delayed availability of deposited funds, news reports about bad banking practices, closed branches and reduced hours.

Jennifer White, senior director of banking and payments intelligence at JD Power, said banks need to do a better job of focusing on fundamental interactions, proactively solving problems and delivering personalized advice to retain deposits and build customer loyalty and trust.

She added:  “Despite widespread efforts to improve the customer experience, many banks are missing the mark on critical customer touch points by treating customers like numbers.”