Stressed about higher interest rates, inflation and mounting debt, clients are less satisfied with Canada’s big banks than in previous years. In particular, they want fees to be clearly communicated, based on findings from J.D. Power’s 18th annual survey of retail banking clients.
The survey, based on responses earlier this year from almost 14,000 customers, measured satisfaction across seven factors, the most important of which were trust, people and account offerings.
Overall, customer satisfaction with the Big Five declined by 10 points (on a 1,000-point scale) year over year to 603, J.D. Power said in a release on Thursday. Mid-size banks saw a decline of seven points to 637.
Half of respondents (50%) were considered financially vulnerable or stressed, up from 44% a year ago, the survey said.
J.D Power found that more customers were paying banking fees, mainly for account maintenance/minimum balance (18%), overdraft or insufficient funds (14%), and automated banking (12%).
Nearly 80% of respondents said the banks could do a better job communicating how to avoid these fees.
In fact, the study found a strong correlation between higher satisfaction and fees-related communications, suggesting that fees are not necessarily what upsets customers, but rather being surprised by them.
“Customers want banks to communicate how to avoid paying fees, provide advice on how to build savings and reduce debt, and resolve problems efficiently,” said Paul McAdam, senior director of banking and payments intelligence with J.D. Power, in the release.
On Tuesday the federal Finance department announced several measures to improve how banks treat clients, including pushing them to work with homeowners facing sharply rising mortgage costs, reducing certain fees such as for insufficient funds, and improving access to low-cost accounts.
Finance also named the Ombudsman for Banking Services and Investments as the sole provider of external complaint handling, effective Nov. 1, 2024.
Bank of Montreal scored 612 in the J.D. Power survey, followed by previous survey leader Royal Bank of Canada (610) and CIBC (604). Bank of Nova Scotia (597) and Toronto-Dominion Bank (594) had below-average results.
The leader among mid-size banks was Scotiabank-owned Tangerine (684).
The survey was conducted during January, February, July and August of this year.