Customers happiest with mobile banking
The growing number of Canadians who use their phones for banking are happier with their financial institutions — and not just because mobile banking is convenient, J.D. Power suggested Thursday.
The market research company’s 2016 Canadian Retail Banking Satisfaction Study found customers who used a banking app reported an overall satisfaction score of 836 out of 1000, while those who didn’t had a satisfaction score of 760.
The scale assigns scores based on seven factors: products, self-service, personal service, facilities, communication, financial adviser and problem resolution.
Mobile apps enable “self-service” interactions, which are increasingly in-demand.
The popularity of mobile banking is not just about the ability to avoid a branch visit — it’s also about financial literacy, said Paul McAdam, senior director of banking services at J.D. Power.
Between 30 and 40 per cent of the customers who use mobile banking are in the app every day, McAdam said, which means they have a thorough understanding of their balances, bank processes and how to generate or avoid fees.
“So it really builds an understanding and knowledge from the consumer’s standpoint of how the banking account operates,” he added.
“If customers have an understanding of the features and the benefits of their accounts, if they understand the fee structures, satisfaction with the bank in our index jumps pretty dramatically and mobile just makes that so much easier.”
Mobile banking contributed to an overall increase in customer satisfaction with financial institutions as it also helped improve other factors by filling in gaps due to smaller branch networks or increasing satisfaction with certain products, J.D. Power said.
The survey found that 34 per cent of customers now use mobile banking, up from 27 per cent last year.
The number of mobile banking users is growing steadily — rising 14 per cent from just two years ago.
As recently as three years ago, mobile banking adoption was very low and customer satisfaction was the worst among all channels — even the call centre, said McAdam.
Mobile and digital banking, driven in part by a host of new tech-savvy financial technology competitors, are changing the face of banking and forcing the big Canadian banks to adapt.
“Formerly there was this mindset that ‘customers need to adapt to us and the way we operate’ and there really has been a shift over the last few years,” McAdam said.
“Now the large banks are moving as rapidly as they can, given the regulatory and compliance environment and the cultures.”
Overall customer satisfaction with Canadian banks has improved as well, despite fee increases, the survey found.
McAdam believes that’s because Canadians are becoming accustomed to the fee increases as banks communicate better to customers, who see the value they’re getting in return for higher fees.
RBC ranked number one in customer satisfaction for the first time in the survey’s history.
TD, which had consistently been ranked first over the past decade, fell to number two.
Tangerine ranked first among midsized banks for the fifth consecutive year.
The survey is based on responses from more than 13,000 Canadians and was fielded from April through May.