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U.S. consumers on their banks: ‘Meh’

By Claes Bell, CFA · Bankrate.com
Wednesday, April 25, 2012
Posted: 4 pm ET

Last week J.D. Power and Associates released its 2012 Retail Banking Satisfaction Study. The banking industry improved very slightly overall, which surprised me a little bit, considering the recent customer revolt over fees epitomized by the Bank Transfer Day movement. From the press release:

The study, now in its seventh year, finds that overall retail banking customer satisfaction has improved by one index point in 2012 to an average of 753 (on a 1,000-point scale) from 2011.

But U.S. consumers' discontent with bank fees is pretty clear if you dig down a little into the numbers. From the press release:

Satisfaction with fees has declined to 609, down significantly from 625 in 2011 and from 656 in 2010. Monthly maintenance fees have the most significant negative impact on fees satisfaction this year--more so than in the 2011 and 2010 studies--while fees assessed for ATMs and debit cards have less negative impacts on fees satisfaction.

This seems about right to me. This fee issue isn't going away. Banks have a strong motivation to improve their profitability of their checking accounts, and they spent 2000 to 2010 convincing customers checking should always be free.

Large national banks, with an overall satisfaction rating of 743, also trailed mid-size banks (781) and regional banks (759) in keeping customers happy.

On the plus side, some of the technology improvements banks have made are beginning to have an impact. People report being more comfortable with ATMs, online banking and mobile banking compared to last year.

The growing role of technology in banking relationships may ultimately present the best possibility of a resolution to the free checking wars. As smartphones penetrate more and more of the U.S. market, more bank customers are going to have constant access to high-powered banking tools in the form of smartphone apps.

Banks don't have to pay rent or salaries for a teller that travels around in the memory of a smartphone, so they'll be able to improve profitability by cutting costs. And customers that are comfortable with interacting with their accounts via the Web probably won't see their overall banking experience diminished by cost-cutting measures like closing branches.

What do you think? Are you satisfied with your bank? Do you feel more comfortable with online banking than you did a few years ago?

Follow me on Twitter: @ClaesBell.

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