Almost 60% of retail bank customers in Canada are classified as financially unhealthy, yet banks are falling short on supporting them to make improvement
Banks are “missing the mark” in helping customers with their financial health, according to Jennifer White, senior director for banking and payments intelligence at J.D. Power.
The J.D. Power 2022 Canada Retail Banking Advice Satisfaction Study found that 59% of retail bank customers in Canada are now considered financially unhealthy amid inflation, rising household costs and record levels of personal debt — factors that are pushing many bank customers to seek financial guidance from their financial institutions.
Yet, despite the growing importance of financial advice, many banks are under-delivering when it matters most, said White.
“Key performance indicators, such as providing an in-depth review of customers’ financial situations or providing tips to help customers stay on budget, are met less than 50% of the time.”
J.D. Power’s study also highlighted that 47% of bank customers who have received advice fall into the financially healthy category, while the remaining 53% are categorized as either vulnerable (28%), overextended (15%) or stressed (10%).
According to J.D. Power, advice and guidance must be personalized to the specific customer and delivered to the right person at the right time. The study observed that customer satisfaction rises to 667 points (on a 1,000-point scale) when they receive personalized advice just once.
This compares to 561 points for customers who receive advice on five or more topics that is not personalized.
The industry average for customer satisfaction is 592. With scores of 599 each, the study revealed MO Bank of Montreal and RBC Royal Bank rank highest in customer satisfaction with retail banking advice, followed by CIBC with 597 points.
The study includes responses from 2,351 retail bank customers in Canada who received guidance from their primary bank regarding relevant products and services or other financial needs in the past 12 months.
The results follow the J.D. Power’s US Retail Banking Satisfaction Survey in April, which also indicated a lack of support from banks to their customers.