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Financial Advice Gains Importance with Bank Customers

Over three-quarters of customers who received financial advice acted on it

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  • Written by  Banking Exchange staff
 
 
Financial Advice Gains Importance with Bank Customers

Financial advice is resonating more than ever with retail bank customers, but only 42% of customers reported recalling that their bank offers guidance, according to JD Power.

The 2024 US Retail Banking Advice Satisfaction Study revealed financial advice has emerged as the key to enhancing overall customer experiences in banking amid persistent macroeconomic problems.

According to the report, customers value financial advice due to the challenges posed by inflation and the fact that fewer than half of retail bank customers in the US are deemed financially healthy.

In particular, financial advice holds significant importance for younger customers, with those under the age of 40 averaging a 60% recall rate, compared to the industry average of 42%.

JD Power revealed offering advice proves valuable for banks, as 76% of customers who received financial advice reported taking action based on it.

Overall satisfaction with retail banking advice increased 163 points when customers act based on specific advice provided by their bank.

The most frequent responses to advice included updating account settings (25%), closely followed by shifting money between accounts (22%) and downloading the bank’s mobile app (22%).

Jennifer White, senior director for banking and payments intelligence at JD Power, said:  “Customers who act on the financial advice and guidance provided by their bank are getting not only help on how to save time or money, but also these services result in increased satisfaction and strong engagement and brand advocacy.”

The report also found that personalized banking advice significantly enhances satisfaction, with overall satisfaction increasing by 196 points when this criterion is met.

Banks have demonstrated progress in improving the personalization of their advice, with 63% of customers reporting that they receive personalized content.

White added:  “As banks get increasingly savvy about how to personalize content by leveraging AI and training their staffs on how best to connect with customers, both recall and usage of financial advice is increasing, which is a very positive step forward for the industry.”

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