Big Banks Growing, Midsize Banks Plateauing

By J.D. Power, Special for  USDR

Big banks[1] have significantly improved in overall customer satisfaction, while Midsize banks have declined and Regional banks have plateaued, according to the J.D. Power 2016 U.S. Retail Banking Satisfaction Study,SM released today. Satisfaction with Big banks rises for the sixth consecutive year, driven by a combination of improved digital offerings, more engaged personal interactions and stronger connections with growth segments of the population, while satisfaction with Midsize banks has dropped for the first time since  2010.

The 11th annual customer satisfaction study is the longest-running and most in-depth survey of the U.S. retail banking industry, with more than 75,000 customers evaluating various aspects of their banking experience. The study measures satisfaction in six factors (listed in alphabetical order): account information; channel activities; facility; fees; problem resolution; and product offerings. Channel activities include six subfactors (listed in alphabetical order): ATM; branch; call center; IVR; mobile; and website. Satisfaction is measured on a 1,000-point  scale.

“Based on their current trajectory, the country’s largest retail banking institutions are expected to achieve a substantial lead in overall customer satisfaction vs. Midsize and Regional banks by 2020,” said Jim Miller, senior director of banking at J.D. Power. “This trend puts Midsize banks most at risk. Regulatory costs have made it difficult for them to invest in strategies to compete with larger rivals, and unless they take proactive steps to change course, we expect this to result in consolidation in the Midsize bank  marketplace.”

Following are the key findings of the 2016  study:

  • Big Banks Close the Customer Satisfaction Gap: Overall satisfaction in the retail banking industry improves to 793 from 790 in 2015. Satisfaction with Big banks improves 6 points to 793 from 2015, compared with 797 for Midsize banks, down 5 points, and 790 for Regional banks, remaining flat. Big bank segment satisfaction improves by 56 index points, nearly closing a 34-point gap with Midsize banks from 2010.
  • Getting Tech Right: Big banks score highest in mobile (851), ATM (837) and online satisfaction (838). Mobile banking in particular has a direct impact on overall satisfaction, which is 27 points higher among customers who use mobile banking than among those who do not. Among mobile users who are satisfied with the mobile offering (mobile satisfaction score of 800 and above) the gap in satisfaction is 197 index points higher than among dissatisfied mobile users, those scoring below 800 index points (868 vs. 671, respectively).
  • Winning in Growth Segments: Big banks have been most successful at acquiring and satisfying millennials, the fastest growing customer segment. Millennials represent the biggest growth potential for retail banks, but also pose much higher risk of attrition.
  • Evolving the Branch Model: While the overall number of bank branches in the United States declines, brick and mortar branches are still a key channel for servicing customers in those moments of truth (e.g., resolving problems and dealing with more complex transactions). This is evident in user preference patterns, with the percentage of customers opening accounts online steadily increasing but the branch continually performing higher in terms of enhancing product understanding and reducing future problems.

“While customer satisfaction with Big, Midsize and Regional banks falls within a tight 7-point range, establishing customer service tools for competitive differentiation is key to a successful path forward,” said Paul McAdam, senior director of banking services at J.D. Power. “We clearly see that the customer satisfaction leaders in retail banking excel by hitting the sweet spot of providing a great digital experience backed by personal  service.”

The study measures customer satisfaction with banks in 11 regions. Study results by region  are:

California Region: U.S. Bank (808)
Florida Region: TD Bank (837)
Mid-Atlantic Region: Northwest Savings Bank (819)
Midwest Region: UMB Bank (821)
New England Region: Bangor Savings Bank (842)
North Central Region: Huntington National Bank (830)
Northwest Region: U.S. Bank (798)
South Central Region: Trustmark National Bank (855)
Southeast Region: United Community Bank (841)
Southwest Region: Arvest Bank (843)
Texas Region: Frost Bank (862)

The 2016 U.S. Retail Banking Satisfaction Study is based on responses from more than 75,000 retail banking customers of more than 130 of the largest banks in the United States regarding their experiences with their retail  bank.

The study was fielded quarterly from April 2015 to February  2016:

Wave 1: April 1, 2015May 4,  2015
Wave 2: July 1, 2015August 3,  2015
Wave 3: September 21, 2015November 2,  2015
Wave 4: January 4, 2016February 3, 2016; February 18, 2016February 22,  2016

Overall Customer Satisfaction Index Scores

J.D. Power.com Power Circle RatingsTM

(Based on a 1,000-point scale)

For Consumers

California

U.S. Bank

808

5

BBVA Compass

805

5

Bank of the West

796

4

Wells Fargo

793

4

Chase

792

4

Region Average

786

3

Bank of America

782

3

California Bank & Trust

780

3

Citibank

775

2

Union Bank

774

2

Florida

TD Bank

837

5

Chase

824

4

PNC

822

4

SunTrust

816

4

Wells Fargo

806

3

Regions Bank

805

3

Region Average

805

3

Citibank

799

3

Fifth Third

793

2

Bank of America

792

2

BB&T

790

2

Mid-Atlantic

Northwest Savings Bank

819

5

Susquehanna Bank

816

5

Huntington

814

5

PNC

807

4

New York Community Bank

805

4

M&T Bank

804

4

NBT Bank

804

4

SunTrust

800

4

Astoria FS&LA

799

4

TD Bank

798

3

Fulton Bank

797

3

Capital One

796

3

Chase

795

3

First Commonwealth Bank

794

3

National Penn Bank

794

3

Community Bank

790

3

Wells Fargo

790

3

Region Average

790

3

First NB of PA

789

3

BB&T

788

3

Bank of America

784

3

Citizens

784

3

KeyBank

784

3

First Niagara

781

3

Valley National Bank

779

3

Apple Bank for Savings

778

3

Beneficial Mutual Savings Bank

773

3

Citibank

772

2

Santander

756

2

HSBC

732

2

Included in the Mid-Atlantic region are Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C.

Midwest

UMB Bank

821

5

First Midwest Bank

806

4

Chase

797

4

Bremer Bank

796

3

PNC

795

3

U.S. Bank

793

3

Commerce Bank

789

3

Wells Fargo

789

3

Region Average

789

3

Regions Bank

784

3

Bank of America

779

3

Bank of the West

779

3

BMO Harris

779

3

Associated Bank

778

3

Citibank

765

2

Fifth Third

765

2

TCF National Bank

745

2

Included in the Midwest region are Iowa, Illinois, Kansas, Minnesota, Missouri and Wisconsin.

New England

Bangor Savings Bank

842

5

Rockland Trust

823

4

TD Bank

801

4

People’s United Bank

787

4

Webster Bank

786

4

Eastern Bank

777

3

First Niagara

770

3

Wells Fargo

769

3

Region Average

768

3

Citizens

766

3

Chase

762

3

Bank of America

755

3

Santander

741

2

Included in the New England region are Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

North Central

Huntington National Bank

830

5

Chase

812

4

1st Source Bank

811

4

TCF National Bank

803

3

Wells Fargo

801

3

City National Bank

800

3

U.S. Bank

800

3

WesBanco Bank

799

3

Region Average

799

3

PNC

798

3

Fifth Third

793

3

Bank of America

786

2

First Financial Bank

786

2

Chemical Bank

784

2

BB&T

783

2

Old National Bank

782

2

Comerica

777

2

KeyBank

776

2

Citizens

774

2

FirstMerit

767

2

Included in the North Central region are Indiana, Kentucky, Michigan, Ohio, and West Virginia.

Northwest

U.S. Bank

798

5

Umpqua

788

4

Wells Fargo

786

4

Region Average

779

3

Chase

776

3

KeyBank

774

3

Bank of America

765

2

Included in the Northwest region are Oregon and Washington.

South Central

Trustmark National Bank

855

5

PNC

844

4

Arvest Bank

829

4

First Tennessee

823

4

Wells Fargo

813

3

U.S. Bank

812

3

BancorpSouth

810

3

Capital One

810

3

Chase

809

3

Whitney Bank

806

3

Regions Bank

805

3

Region Average

805

3

Bank of America

789

3

SunTrust

786

2

BB&T

782

2

BBVA Compass

774

2

Included in the South Central region are Alabama, Arkansas, Louisiana, Mississippi, and Tennessee.

Southeast

United Community Bank

841

5

BB&T

826

4

Regions Bank

823

4

First Citizens Bank & Trust

822

4

TD Bank

821

4

Wells Fargo

805

3

Region Average

805

3

Chase

804

3

PNC

800

3

Bank of America

797

3

SunTrust

793

3

Fifth Third

788

2

South State Bank

773

2

Included in the Southeast region are Georgia, North Carolina, and South Carolina.

Southwest

Arvest Bank

843

5

BancFirst

823

4

FirstBank

809

4

Zions Bank

803

4

U.S. Bank

801

4

Chase

798

3

Bank of Oklahoma

797

3

Region Average

794

3

Bank of America

791

3

Wells Fargo

791

3

Bank of the West

784

3

BBVA Compass

774

2

Included in the Southwest region are Arizona, Colorado, New Mexico, Nevada, Oklahoma, and Utah.

Texas

Frost Bank

862

5

Woodforest National Bank

823

4

Prosperity Bank

822

4

Wells Fargo

815

4

Amegy Bank

806

3

Chase

806

3

Region Average

806

3

First Financial Bank

803

3

BBVA Compass

798

3

Capital One

796

3

Comerica

793

3

Bank of America

790

2

Power Circle Ratings Legend

5 – Among the best

4 – Better than most

3 – About average

2 – The rest

Award-Eligible U.S. Retail Banks Included in the Study

Company

Executive Name

U.S. Address

1st Source Bank

Christopher Murphy III

South Bend, Ind.

Amegy Bank

Steve Stephens

Houston, Texas

Apple Bank for Savings

Alan Shamoon

New York, N.Y.

Arvest Bank

Kevin Sabin

Lowell, Ark.

Associated Bank

Philip Flynn

Green Bay, Wis.

Astoria FS&LA

Monte Redman

New Hyde Park, N.Y. 

BancFirst

David E. Rainbolt

Oklahoma City, Okla.

BancorpSouth

Chris Bagley

Tupelo, Miss.

Bangor Savings Bank

Robert Montgomery-Rice

Bangor, Maine

Bank of America

Brian Moynihan

Charlotte, N.C.

Bank of Oklahoma

Stan Liearger

Tulsa, Okla.

Bank of the West

Nandita Bakhshi

San Francisco, Calif.

BB&T

Kelly King

Winston Salem, N.C.

BBVA Compass

Manuel Sanchez-Rodriguez

Houston, Texas

Beneficial Mutual Savings Bank

Gerard Cuddy

Philadelphia, Pa.

BMO Harris

David Casper

Chicago, Ill.

Bremer Bank

Stan Dardis

Saint Paul, Minn.

California Bank & Trust

David Blackford

San Diego, Calif.

Capital One

Richard Fairbank

McLean, Va.

Chase

James Dimon

New York, N.Y.

Chemical Bank

David Ramaker

Midland, Mich.

Citibank

Michael Corbat

New York, N.Y.

Citizens

Bruce Van Saun

Providence, R.I.

City National Bank

Charles Hageboeck

Cross Lanes, W.Va.

Comerica

Ralph Babb Jr.

Dallas, Texas

Commerce Bank

David Kemper

Kansas City, Mo.

Community Bank

Mark Tryniski

De Witt, N.Y.

Eastern Bank

Richard Holbrook

Boston, Mass.

Fifth Third

Greg Carmichael

Cincinnati, Ohio

First Citizens Bank & Trust

Frank Holding Jr.

Raleigh, N.C.

First Commonwealth Bank

Thomas Michael Price

Indiana, Pa.

First Financial Bank

Claude Davis

Cincinnati, Ohio

First Midwest Bank

Michael Scudder

Itasca, Ill.

First NB of PA

Vincent Delie Jr.

Pittsburgh, Penn.

First Niagara

Gary Crosby

Buffalo, N.Y.

First Tennessee

D. Bryan Jordan

Memphis, Tenn.

FirstBank

John Ikard

Lakewood, Colo.

FirstMerit

Paul Greig

Akron, Ohio

Frost Bank

Phillip Green

San Antonio, Texas

Fulton Bank

R. Scott Smith Jr.

Lancaster, Pa.

HSBC

Patrick Burke

New York, N.Y.

Huntington

Stephen Steinour

Columbus, Ohio

KeyBank

Beth Mooney

Cleveland, Ohio

M&T Bank

Robert Wilmers

Buffalo, N.Y.

National Penn Bank

Scott V. Fainor

Allentown, Pa.

NBT Bank

Martin Dietrich

Norwich, N.Y.

New York Community Bank

Joseph Ficalora

Westbury, N.Y.

Northwest Savings Bank

William Wagner

Warren, Pa.

Old National Bank

Robert Jones

Evansville, Ind.

People’s United Bank

John Barnes

Bridgeport, Conn.

PNC

William Demchak

Pittsburgh, Pa.

Prosperity Bank

David Zalman

Houston, Texas

Regions Bank

O. B. Grayson Hall Jr.

Birmingham, Ala.

Rockland Trust

Christopher Oddleifson

Hanover, Mass.

Santander

Scott Powell

Boston, Mass.

South State Bank

Robert Hill

Columbia, S.C.

SunTrust

William Rogers Jr.

Atlanta, Ga.

Susquehanna Bank

William Reuter

Lititz, Pa.

TCF National Bank

Craig Dahl

Wayzata, Minn.

TD Bank

Mike Pedersen

Cherry Hill, N.J. 

Trustmark National Bank

Gerard Host

Jackson, Miss.

UMB Bank

J. Mariner Kemper

Kansas City, Mo.

Umpqua

Raymond Davis

Portland, Ore.

Union Bank

Angie Muhleisen

Lincoln, Neb.

United Community Bank

Jimmy Tallent

Blairsville, Ga.

US Bank

Richard Davis

Minneapolis, Minn.

Valley National Bank

Gerald Lipkin

Wayne, N.J.

Webster Bank

James Smith

Waterbury, Conn.

Wells Fargo

John Stumpf

San Francisco, Calif.

WesBanco Bank

Todd Clossin

Wheeling, W. Va.

Whitney Bank

John Hairston

Gulfport, Miss.

Woodforest National Bank

Robert E. Marling

The Woodlands, Texas

Zions Bank

Harris Simmons

Salt Lake City, Utah

SOURCE J.D.  Power

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.