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Big Bank Profits Up, Customer Satisfaction Down: JP Power

July 30th, 2015  |  Canadian Business

Canadian big banks are losing ground with their customers again this year after an annual survey showed a 12 point average drop in customer satisfaction. Jim Miller, Senior Director with the marketing research giant JD Powers, says that recent increases in bank fees and cuts to core services may cost them customer loyalty.

The report showed the average monthly fee increased from $12.18 to $13.15 and a jump in additional service fees. “Customers will wait only so long in line at a branch or on the phone to handle a transaction or resolve a problem, especially when they are already unhappy with high fees.” Miller states.

While increases to maintenance fees were described as moderate, the supplementary charges over and above the monthly fees jumped by 46 per cent between 2004 and 2013. Charges like interac e-transfers, paper statements, and checking services have increased exponentially in that time and are a solid source of revenue for banks.  

Record profits for retail banks in Canada are being achieved at the expense of customer satisfaction as customers report increased fees and reduced levels of service in the branch and on the phone,” Miller shared in a statement.

The survey also showed that 9 percent of big bank customers “definitely will or probably will” switch banks within the year. Many mid-sized like Tangerine and President’s Choice Financial offer excellent customer service and banking services at a fraction of the price and will become more attractive if this trend continues.

Customers may also be looking for a new home for their insurance products as well, since many bundle house and auto insurance with their banking services. Insurers likes Aviva, Dominion, and Economical may seem an uptick in business as customers abandon their one stop shop banking solution and look elsewhere for options.  

Image Courtesy of Adobe Stock