People less satisfied with banks, survey says

Increased fees, lagging service responsible for ratings drop for top five institutions

Canadians are less satisfied with their banks because of higher fees and decreased services, according to a survey published Thursday.

The 2015 Canadian Retail Banking Satisfaction Study by global research firm J.D. Power shows the Big 5 Banks — TD Canada Trust, RBC Royal Bank, Scotiabank, CIBC and BMO Bank of Montreal — dropping an average of 12 points from 2014 in overall customer satisfaction.

Mid-size banks Tangerine, Presi- dent’s Choice Financial, ATB Financial, National Bank of Canada and Laurentian Bank of Canada dropped an average of seven points in customer satisfaction since last year.

Satisfaction is based on a 1,000point scale and is measured based on product, self-service, personal service, facilities, communication, financial adviser and problem resolution. Overall satisfaction with Big 5 Banks is averaging at 737 points; TD Canada Trust leads the pack with 746 points while HSBC trails at 716 points.

Jim Miller, senior director of banking services at J.D. Power, said the 12-point drop is the result of higher banking fees and fewer services.

“Any time banks increase fees, cus- tomers aren’t happy with it and . . . now that when they go in the branch or call in to the call centre, they wait longer, that’s the main driver that causes them to be less satisfied.”

Although the ubiquity of online banking means fewer people are walking into branches, staff cutbacks result in longer wait times for service, he said.

Of Big 5 customers, 46 per cent reported paying a monthly fee, up 6 per cent from 2014, and the average fee was up about $1 per month.

“So more people are paying and they’re paying more,” said Miller, adding the fees are harder to swallow at a time when banks are reporting record earnings.

Miller said he’s surprised at margin of the 12-point decrease in satisfaction, which bent the post-recession upward trend. “Twelve points means the customer has noticed there is something different.”

Mid-sized banks fared better than the Big 5, with an average of 759 points. Tangerine, formerly ING Direct, scored the highest at 811 points.

“Some banks in the mid-size range really have very low fees,” said Miller.

Because Tangerine doesn’t have branches, customers are served remotely.

According to the survey, 9 per cent of Big 5 customers would consider switching banks within the next year. Miller said while few people actually switch banks, Canadians looking for lower fees should seek alternatives.