Canadian consumers are aiming for convenience in their banking relationships, according to the J.D. Power and Associates '2007 Canadian Retail Banking Customer Satisfaction Study', which ranked TD Canada Trust highest among the country's 'Big 5' retail banks.
In terms of mid-size retail banking, it was President's Choice Financial that ranked highest in terms of customer satisfaction.
Six key factors
The study, a follow-up to 2006's inaugural survey, looked into customer satisfaction levels with the overall retail banking experience in Canada. In both segments (the Big 5 Retail Banks and the Mid-Size Retail Banks), customer satisfaction was measured by six key factors which include, in order of importance, transaction experience, facilities, account setup and product offerings, account statements, fees, and problem resolution.
Among the Big 5 Canadian banks, TD Canada Trust ranked highest overall for the second year running with a score of 775 on a 1,000-point scale, and performing particularly well in five out of the six factors (account setup and product offerings, account statements, facilities, transaction experience, and problem resolution).
President's Choice Financial was first among mid-size retail banks with a score of 830, performing particularly well for transaction experience, account setup and product offering, account statements, and fees.
What consumers want most
The study found that convenient services and innovative banking practices are what differentiate the highest-ranked banks in each segment. In particular, customers felt that convenience - in terms of branch locations and opening hours - and no-fee banking are important reasons for choosing one bank over its competitors.
For example, 61% of TD Canada Trust customers reported that convenience was "extremely important" in their choice of bank, compared to only 46% of retail banking customers overall. "Rather than operating only during traditional banking hours, TD Canada Trust offers extended weekday and weekend hours, which is innovative in the banking industry," explained Charles Schade, senior director of research at J.D. Power and Associates. "TD Canada Trust has also adopted other innovative approaches, such as providing financial information geared toward college and university students through Facebook.com. As a result, its customers report that they perceive the bank as particularly innovative, which appears to contribute to its high level of overall satisfaction."
Fees still an issue
A large percentage of President's Choice Financial customers are attracted by its no-fee banking strategy, with 78% of the bank's customers saying that free services were the main reason for their choice of bank.
"President's Choice Financial has managed to eliminate fees while still offering a full range of banking services that adequately serve - and even delight - its customers," noted Schade. "By providing banking services online and by phone, automated banking machines (ABMs), and pavilions located in supermarkets, President's Choice Financial not only differentiates itself but also excels in providing highly satisfying service."
Loyalty comes from delight
The study also found that banks that succeed in delighting retail banking customers also tend to benefit from increased levels of customer loyalty when consumers begin to shop around for other financial services. Approximately 80% of retail banking customers reported using the credit products of their primary banking provider.
According to the survey, retail banking is actually a very personal experience for most Canadians who, in general, come into direct contact with their bank accounts more than 20 times per month. Each of these interactions, Schade suggests, provides the bank with an opportunity to either delight the customer or to disappoint them and lose their trust and confidence. Those that can delight their customers therefore stand a greater chance of extending their relationship beyond the branch and into greater product usage, loyalty, and advocacy.