Bank dissatisfaction benefits brokers

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It’s one bit of news brokers are likely to capitalize on, with a new study suggesting customer satisfaction with the Big Five – from their mortgages to their rising fees – is again on the decline.

Overall customer satisfaction with Canada’s largest banks, as well as its midsize ones, fell this year, due largely to a decline in fee satisfaction, according to the J.D. Power and Associates 2012 Canadian Retail Banking Customer Satisfaction Study, released Thursday.

The advocacy metric, or the percentage of customers who say they "definitely will" recommend their bank to family and friends, declined by five percentage points, while customer loyalty, or the percentage of customers who say they "definitely will" reuse their bank in the future, declines by four percentage points, compared with 2011.

The drop in satisfaction directly impacts loyalty but also customer referrals for the big banks.

Broker channel lender TD has done the best job of hanging onto loyal customers, with CIBC and Scotia most challenged to that area.

The rankings may reflect on the relative ease or difficulty in moving clients at renewal or for refis, said one leading broker.

The fact that midsize banks, which have seen their share of mortgage originations grow, are doing better in the eyes of their customers may also highlight the challenges brokers face in moving clients from those lenders.

Among midsize banks, ING Direct Canada ranks highest in overall customer satisfaction with a score of 834. Its product offerings, including mortgages, performed particularly well, according to JD Power.

The study, now in its seventh year, also breaks down customer by the size of the institution: Big 5 Banks, midsize banks and credit unions.

In all segments, customer satisfaction is measured across seven factors: account activities; product offerings, including mortgages; and account information and fees, among others.

In addition to the impact of the decline in satisfaction, loyalty and advocacy rates have also been negatively affected by deterioration in customers' perceptions of their bank's brand image, said the report’s authors.

 

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