Canadians Are Less Satisfied With Their Banks: J.D. Power

Canadian Bank Satisfaction

How happy are you with your bank? If the answer is “less than enthralled”, you’re not alone: the 10th edition of J.D. Power’s Canadian Retail Banking Customer Satisfaction Study finds Canadians overall are less content with their lenders, and that satisfaction has been dropping for years.

Bank Customers Can’t Get No Satisfaction

The study, which splits lenders into Big Banks (BMO, Scotiabank, TD, RBC and CIBC) and Midsize Banks (think Tangerine and PCF), gave each a score out of 1,000 based on the following criteria:

  • Product

  • Self-Service

  • Personal Service

  • Facilities

  • Communication

  • Financial Advisor

  • Problem Resolution

Smaller lenders and credit unions were not included in the survey.

Click here to view the best no-fee bank accounts in Canada

Overall, satisfaction among big bank consumers dropped 12 points from 2014 to 737. Midsize Banks performed slightly better at 759, a seven-point drop from last year. If bank satisfaction scores came in the form of school report cards, our nation’s lenders would be C students.

Big Bank Customers Pay More Fees

An uptick in service fees was the top reason consumers see red; not only are more big bank consumers paying them for everyday banking, but that they’ve actually gotten pricier. Forty six per cent of this consumer group shell out monthly for their chequing accounts, according to the study – a 6 per cent increase – and pay an average of $13.15, up from $12.18 last year.

This doesn’t come as a surprise, given the recent move by the Big Five to hike their banking fees. In May, each lender announced change in some form to their everyday banking packages, special groups discounts and, in some instances, new pay-to-pay charges, the latter of which were dropped due to consumer backlash.

“When a retail bank increases fees and trims back on its core services to customers for the sake of increasing profits, they may be losing touch with one of the most important aspects of their business survival—the customer,” said Jim Miller, senior director of the banking practice at J.D. Power, in a press release. “Retail banks that make their short-term earnings at the expense of their customers are trading long-term customer loyalty for short-term profits.”

Midsize Banks seem to have bucked the fee trend, as their consumers actually saw a small drop in fees. Only a quarter pay any at all, at an average of $9.70, down from $10.21 in 2014.

Who’s On Top?

TD defended its spot as top Big Bank consumer satisfaction performer for the 10th straight year with a score of 746. Of the Midsize Banks, Tangerine (formerly known as ING Direct Canada) came out as head of the class for the fourth year running with 811. The study noted that “TD Canada Trust performs well in all seven factors, particularly in facilities”, and that Tangerine “performs particularly well in product, personal service, self-service and communication.”

Making the Switch

Canadian consumers have spoken… so does that mean they’ll move to greener, no-fee pastures? Maybe. Of the surveyed Big Bank consumers who indicated they were dissatisfied, 9 per cent said they “definitely or probably will” switch banks within the next 12 months. That’s up only 2 per cent from 2014.

This isn’t the first study to find banking consumers tend to be all talk and no action. Several years ago, a Bank of Canada study found 72 per cent of consumers have “positive bank bias”, and that as many as 30 per cent refuse to consider non-dominant banking institutions – a decision that can limit their banking options to as low as three. While skewed to the mortgage selection process, the BoC study also found that sticking blindly with one’s financial institution instead of exploring options comes with a hefty price tag – between $759 to $1,617!

Also read: Canadians Are Willing to Make the Switch… If the Price is Right>

The moral of the story: Know your banking options, and ask these questions when picking the perfect account for your needs:

  • Is a minimum balance required?

  • Are there any monthly fees?

  • Will I earn interest?

  • Will I pay to move my money?

  • Will I pay to access my cash?

Would you switch banks if you were unsatisfied with their products or services? Tell us in a comment, or visit us on Facebook and Twitter.

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