J.D. Power conducted its first 2018 Retail Banking Advice Study which showed what the majority of consumers are looking for in their bank.
The survey results showed that, despite the constant move toward digitalization and online transactions, consumers still value advice given by banks. However, the survey also showed banks are missing this opportunity to educate their consumers.
About 78% responded that they were interested in receiving financial advice or guidance from their bank. However, only 28% answered that they receive that financial advice. What’s more, customer satisfaction in their bank surges when consumers feel they are receiving the advice they need.
“In recent years, large U.S. retail banks have steadily improved customer satisfaction because of technology investments to provide greater banking convenience and more-consistent products and services,” said Paul McAdam, J.D. Power senior director of the banking practice. “The industry’s service improvements have led more customers, particularly younger ones, to view their retail bank as a viable provider of advice.”
“In response, many banks are increasing their emphasis on providing practical advice and guidance to help customers gain greater control over their finances and meet specific financial goals,” McAdams said. “The challenge for banks is getting the advice formula right and delivering it in a personalized manner across all channels—not only at the branch, but also via the website and mobile app.”
Among the most common types of advice consumers want from their bank includes tips to help improve their financial situation – 41%, investment-related advice – 39%, retirement-related advice – 35%, advice to help keep track of spending and household budgets – 33% and saving for a large purchase – 29%.
And of consumers who have received advice from their bank, a full 89% say they believe they benefited from the information.
However, there is a disconnect when it comes to delivering helpful advice in the digital age. Of customers who received advice from their bank, 58% of those who received it face-to-face said it met their needs, compared to just 45% among customers who received it digitally and 33% who received it via email.
A full 58% of consumers responded they want to receive advice through their bank’s website and mobile app, yet only 12% said they received it in this manner.
But in order to bridge the gap, banks must find a way to efficiently communicate with their customers digitally, especially since Millennials are among the most receptive to bank advice.
About 34% of customers younger than 40 said they are very interested in receiving advice from their bank, and customers ages 25 to 39 have the highest levels of satisfaction with bank-provided advice. Only 9% of customers from this age group answered that the advice they received from their bank added no value.
“For banks, the key takeaway from this study is that there is a huge opportunity to leverage a combination of in-person and digital interactions to provide advice and guidance that assist customers in their financial journey,” McAdam said.