Customer satisfaction up at banks

According to a recent JD Power and Associates retail banking customer satisfaction survey, happiness with banks has increased over the past year, the Press Association reports.

According to a recent JD Power and Associates retail banking customer satisfaction survey, happiness with banks has increased over the past year, the Press Association reports.

Researchers graded customer satisfaction averages on a 1,000 point scale, finding that the number rose from 693 last year to 698 in 2011.

Furthermore, the study revealed that in 2010, 21 percent of customers experienced a problem with their financial institution, compared to 19 percent this year.

"It appears that banks have taken action to improve the customer experience, and this effort has paid off," said Stuart Crawford-Browne, Director of the Services and Emerging Industries division at JD Power and Associates.

The main driver for improvement was increased satisfaction at branch facilities, a notion that's echoed in a recent InformationWeek article that found customers typically prefer to perform wealth management or private transactions at their branch as opposed to online.

In addition, branches were preferred because account holders felt more comfortable physically sitting across from knowledgeable bank executives during complex purchases or high-involvement decisions - such as mortgage financing for retirement investing. This also meant that consumers felt more obliged to return to their branches during subsequent important stages of these processes, as branch workers' financial advice tended to have a greater effect in person rather than online or over the phone.

However, there is still room to improve customer satisfaction and loyalty.

"Retail banks … are still not consistently delivering on customer pain points, such as fees, problems and complaints," researchers from the JD Power study exclaimed.

One of the most effective ways to address these "pain points" is to improve communication. Today's savvy investors have lost significant trust in banks and perform their due diligence by researching products on the internet or via social networks before committing to anything. By disclosing relevant information in a "transparent and easy to understand manner," bank managers can give customers the reassurance they need to accurately comprehend what they're being offered.

In addition, branch staff should be trained to deliver top-notch customer service, which can be accomplished be equipping them with "functional knowledge of various products and services." Employees should also be taught to engage customers and go above and beyond to meet their needs. Acting as a knowledgeable guide to help customers achieve their financial goals increases the likelihood they'll return for more advice or to make important monetary decisions.