Although online banking is by far the most widely used and preferred method among Canadians to complete banking transactions, in-person branch experiences are more critical in terms of forming lasting impressions of their financial institution, according to the J.D. Power and Associates 2006 Canadian Retail Banking Customer Satisfaction Study.
The study examined customer satisfaction with the overall banking experience, including customer service, product offerings, fees, statements and banking channel details. It found that transactional experiences drive satisfaction with retail banking, accounting for nearly 50% of overall satisfaction.
Customers going online
The study also found that 77% of Canadians use online banking capabilities. For nearly half of retail banking customers, this service is considered "extremely important" and is the preferred banking channel for 60% of Canadians. On average, banking customers visit their bank's web site 14 times per month to complete routine banking transactions, such as viewing account statements and balances.
"Online banking is convenient, but an excellent online offering cannot replace a positive in-branch experience," said Charles Schade, senior director of research for J.D. Power and Associates. "Customers continue to rely on face-to-face contact to build a trusting relationship. That personal interaction cannot be duplicated online or anywhere else but at the bank branch."
Across the industry, overall banking satisfaction was determined based on six factors (listed in order of importance): transaction methods; account set-up and product offerings; facility; account statements; fees; and problem resolution.
Among the 'Big 5' Canadian banks, TD Canada Trust ranked highest in overall customer satisfaction. TD Canada Trust has leading scores among the Big 5 for most transactional touch points, as well as broader drivers of customer satisfaction such as facility and account statements. TD Canada Trust was followed by Scotiabank and RBC Royal Bank respectively.
The study noted that, on average, 13% of transactions take place within the bank. When customers visit their bank branch, a positive experience is driven by personal attention from the teller, efficient service and access to the senior-level staff. In general, credit unions give their customers more care and attention than banks, establishing business procedures that ensure their customers are not waiting in line for more than five minutes, and that transactions are completed with efficiency.
"In this era of convenience-oriented services, the appeal of extended operating hours cannot be underestimated," Schade warned. "Although it's difficult for large institutions to compete with smaller institutions and credit unions - which often have more flexibility to respond to customer needs - banks have the ability to capitalise on their overwhelming presence in the marketplace by providing a welcoming environment and extended hours of service, focusing on providing the type of service that customers are unable to receive online."
Convenience channels are diminishing the need to visit branches to conduct routine banking transactions. In fact, nearly one-third of customers do all of their banking outside the bricks-and-mortar facility. But while convenience has become a requirement for retail banking customers, financial institutions run the risk of becoming distanced from their customers and, more worryingly, losing out on the opportunities that face-to-face contact provides - such as having the chance to impress customers and show appreciation for their business.