Fin - Balance Sheet - CA

Canadians learning to love big banks?

Brenda Bouw
Balance Sheet

It’ll never be a love affair, but Canadians are reporting better relationships with their banks and are even getting used to paying those annoying fees.

Still, if Canadians could change a one thing about their banking partners, they'd like to see more innovation in the business, according to a new survey.

The eighth annual J.D. Power retail banking study shows overall customer satisfaction with the banks has risen 19 points to 772, compared to 753 a year ago. (The points are rated on a 1,000-point scale, so while that's an improvement, there's clearly room to grow.)

Even banking fees aren’t upsetting as many customers. The survey shows satisfaction jumped 35 points to 627. It’s not so much that Canadians accept the fees, they’re just more understanding of how they work. Fewer changes to fees can also help to shape attitudes. Only 21 per cent of customers saw changes to their bank fees in 2013, as compared with 27 per cent a year earlier, the survey shows.

The study ranks Canada’s “Big 5” banks as well as midsize banks and credit unions, ranking seven factors from product offerings to fees and problem resolution.

TD Canada Trust received the highest marks among the big banks, while ING Direct (now owned by Scotiabank) ranked highest in overall customer satisfaction in the midsize category.

The survey was more favourable to banks than one released by the Canadian Federation of Independent Business this spring, which shows small and medium-sized businesses prefer credit unions to Canada’s big banking institutions.

More innovation, security needed

That said, the J.D. Power survey shows banks have more work to do if they want to keep up and improve their customers relationships, including becoming more innovative.

“Retail banking customers in Canada have high expectations when it comes to using technology to conduct their banking business,” the report says, adding that expectations aren’t being met in areas such as mobile banking.

The number of customers who saw their bank as being innovative fell to 58 per cent in 2013, as compared with 66 per cent in 2012, the survey shows.

But improving technology isn’t the only solution to keep customers happy, said Jim Miller, senior director of the banking practice at J.D. Power.

“Banks must also execute well during key customer touch points or 'moments of truth,' such as opening a new account, problem resolution and handling financial needs associated with life-changing events,” he said.

The Canadian Bankers Association (CBA) says its member companies have been working to address customers' needs over the years, including such moves as long branch hours and the recent introduction of apps for mobile banking.

CBA spokesperson Maura Drew-Lytle said banks are also constantly working to improve account security. Banks spent $7.7 billion on technology last year to improve security and client service, according to the CBA.

"Customers may not see it and often take it for granted, but banks must continuously improve their security measures to protect their customers’ money and personal and financial information," said Drew-Lytle.

The CBA said the J.D. Power customer satisfaction survey findings are consistent with its most recent public opinion research, which found that 86 per cent of Canadians have a favourable impression of banks in Canada and 94 per cent of Canadians have a favourable impression of their own bank.

"Banking in Canada is a very competitive business. If a customer feels that they aren’t happy with their experience with their bank, it’s very easy to take their business elsewhere," said Drew-Lytle. "Banks are very aware of that and have put significant resources behind customer service. It’s all about giving customers access to their banking services how and when they want it and, often, through multiple channels.

Other findings from the J.D Power survey include:

  • Canadians have used their mobile phones to conduct a banking transaction an average of 33 times in 2013, compared with 51 times in the United States.
  • Problem resolution satisfaction has improved by 26 points to 620, compared with 594 in 2012.
  • Problem incidents fell to 14 per cent in 2013 as compared with 17 per cent in 2012
  • 42 per cent of customers say they will "definitely will" reuse their retail bank, compared with 39 per cent in 2012.

J.D. Power Survey: Big 5 Banks ratings

1. TD Canada Trust (781)

2. BMO Bank of Montreal (765)

3. RBC Royal Bank (764)

4. Scotiabank (759)

5. CIBC (750)

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