Bank customers’ financial health is declining across the US despite a significant decrease in the inflation rate over the past year, according to JD Power.
The market research company found that the percentage of financially healthy customers has hit its lowest point in a year, with customer satisfaction regarding their financial situation also plummeting to its lowest level since data tracking began.
Only 29% of respondents reported being financially healthy, while 46% described themselves as vulnerable. These figures represent a 12-month low for financially healthy customers and the highest mark for vulnerable customers in the past year.
Customer sentiment regarding financial health status, stress levels, and empowerment to improve their financial situation have all fallen to a 12-month low, with overall satisfaction reaching the lowest point since data tracking began.
As financial conditions continue to deteriorate, customers are placing renewed emphasis on savings outside of employer-sponsored retirement accounts, JD Power reported. Approximately 44% of customers have placed their non-retirement funds in either a savings or higher yield account at their primary bank, while 24% have chosen an investment or wealth management firm. A further 15% opted for a secondary bank.
More than two in five (41%) admitted that they had no savings outside of a retirement account.
JD Power recommended that banks “could ingratiate themselves to customers” by helping with optimizing their savings, including by “actively reaching out with tools, advice and options that would help in both the short and long term”.
Despite 41% of customers reporting no non-retirement savings, only 10% claim not to have an emergency savings account, with 44% maintaining their emergency funds in a savings account at their primary bank. More than a quarter of customers (28%) have had to tap into their emergency savings accounts in the past 90 days to cover everyday expenses like gas, food, or rent.
The research follows findings from separate work by JD Power that revealed that more businesses than ever were receptive to getting financial advice from their bank. This survey found over half (57%) of small business customers were receiving financial advice from their banks, including about reducing costs, spending and saving guidance, and improving credit scores.
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