Most banks claim they put the customer first – but who is really delivering on this claim? Every year J.D. Power, Forbes, and industry publications like The Financial Brand research which banks are doing the best job at putting consumer’s needs first. They don’t always agree on which bank is top of the list, but common themes do emerge from their studies, providing banks with some fantastic insights.
The top dogs in 2017
J.D. Power rates PNC and Chase neck and neck in their 2017 review, and for the first year big banks overtook midsize and regional banks in terms of an overall rating by a slim margin. However, Forrester places military bank USAA as the leader in customer experience, and also ranks Navy Federal Credit Union ahead of traditional banks. In Canada, J.D. Power rates RBC and TD within a point of each other, but online banks Tangerine and President’s Choice scored higher overall. Regardless of which is the real top dog, each of these financial institutions is doing something to connect with their customers and reduce the likelihood that they will slowly trickle away over time.
This is what we can learn from them.
USAA has been lauded for its exceptional customer service by organizations including Fortune, Forrester Research, and J.D. Power and Associates. Not technically a bank but an inter-insurance exchange, USAA offers US armed forces and their families some of the best banking services in the country. Excellent rates and low fees are accompanied by perks such as a car-buying service that helps members get the best price on a car purchase, refunds on ATM fees, and thoughtful breaks on fees, insurance rates, and rebates on interest for active-duty service members.
USAA did not fall prey to the bad behavior that rattled the industry, and not only refused any federal bailout money after the 2008 crisis, but actually grew while other financial institutions were on the verge of collapse. USAA’s perks clearly reflect an understanding of their members’ needs and deliver on their promise of responsible banking with members as their top priority.
Tangerine, an online-only bank that caused a stir in 1997 with no-fee checking accounts, better interest rates, cash-back credit cards, and check deposit via mobile banking, pushed Canadian banks to up their game significantly.
Within a few years, all the major banks began emulating Tangerine’s app, for example allowing customers to deposit checks via mobile. Tangerine presents itself as “working as hard as you do for your money”, a message that has resonated with thrifty millennials and members of Generation Z. Even though Tangerine dialled back some of the benefits of their cash-back credit card, money-wise consumers still get a better deal at Tangerine.
The Finer Things
After a ten year winning streak at the top of J.D. Power’s list, TD is now neck and neck with competitor RBC. TD’s Theresa McLaughlin told Marketing magazine “A big part of what we’re doing right is we listen… the most important thing for us is to keep up with what our customers say is important to them. And we do that on a regular basis.” This tactic has paid off for TD.
The bank doesn’t try to compete with bargain fees or crazy high-return everyday savings accounts. Instead they try to look at the customer journey from start to finish, finessing little pain points along the way so that customers have the most comfortable banking experience possible.
Mobile Money Management
PNC’s Virtual Wallet is a service that’s included with every checking account. It offers advice, tracking, and management through visual graphs and charts that cluster funds into Spend, Reserve, and Growth categories, which are actually separate accounts that interact seamlessly. Simple tools, such as “danger days” which appear red on the customer’s calendar if there is a danger that an account may be overdrawn on that date, help customers visualize their financial status and plan ahead.
Virtual Wallet stands apart from other similar services by offering more complex financial management in a relatively tangible way. Although the size and scope of the program may be a bit overwhelming to first time users, once on-boarded it helps customers to visualize their money in a different way, one that could benefit users considerably.
These financial institutions are offering customers what they really want. This is only possible if banks listen and understand their customers in the first place. Most banks are improving in this area, but areas that are still waiting to be nurtured are:
1. Addressing financial confidence.
Convenience has been well addressed by digital platforms, and banks are working on building trust. But consumers are going to begin asking more of banks: they want to feel confident about their money.
2. Supporting small businesses.
Chase is leading the way in community development with a focus on four key areas: jobs and skills, neighborhood revitalization, financial health, and small business expansion. This not only makes sense from a humanitarian perspective, it also makes fiscal sense. As local business clusters flourish, they become economic engines that can help languishing cities to rebuild and become vibrant again.
3. Using employees to build relationships.
Banks are starting to realize they need to rethink their staffing models, and this needs to continue to evolve. Employee engagement at RBC, including training and even accreditation, pushed them to the top of J.D. Power’s list for the past two years.
4. Recognizing the high-value client.
In North America, there has been a bit of hesitation around developing VIP programs, but if banks want to keep and win more high-value customers, they will need to take cues from what banks in China are already doing – creating a special customer experience model for clients who have more capital invested in their bank.
Customers have a world of options when it comes to financial services. It has become harder than ever for banks to differentiate themselves and stand apart. Developing a best-in-class customer experience will become the next must-have for banks, and these top performers provide great insights and food for thought as banks plan how to develop their own new and improved experience.