Report highlights an increase in customer satisfaction for banks overall
RBC Royal Bank and Tangerine Bank have emerged as top performers in customer satisfaction, according to the latest J.D. Power 2024 Canada Retail Banking Satisfaction Study.
The study, now in its 19th year, has indicated a rise in customer satisfaction for Canadian banks, with RBC Royal Bank leading the Big 5 banks and Tangerine Bank maintaining its dominant position among mid-size banks for the 13th consecutive year.
RBC Royal Bank received a satisfaction score of 623, placing it at the forefront of Canada’s largest banks, while Tangerine Bank outperformed its peers with a score of 684. ATB Financial ranked second among mid-size banks with a score of 653, and Simplii Financial followed closely with 649.
The study, based on feedback from over 14,000 retail banking customers, indicated that customer satisfaction for both large and mid-size banks improved by 8 and 7 points, respectively, since 2023.
This increase, however, reflects cautious optimism among Canadian consumers about the economy and their personal financial outlooks, according to a news release. Customer confidence in personal finances rose slightly from 5.68 to 5.78 on a 10-point scale, while their economic outlook improved from 4.84 to 5.02.
Jennifer White, senior director of banking and payments intelligence at J.D. Power, noted the positive shift but highlighted potential risks for banks. “The improvement in customer satisfaction is great news for the Canadian banking industry, but it’s important that the industry focuses on leveraging the momentum,” said White. She emphasized the need for banks to strengthen relationships with customers, especially as 63% of bank clients maintain deposits at multiple financial institutions.
Key drivers of satisfaction
The study found that trust plays a critical role in determining customer satisfaction. Small incidents that erode trust were highlighted in the report as significant in prompting customers to switch banks. These small incidents include unexpected fees, blaming the customer for an error, and media reports of poor banking practices, with 54% of customers citing unexpected fees as a leading cause of dissatisfaction.
The report also highlighted the importance of branch services, with nearly half of bank customers continuing to use both digital and in-person banking. However, only 10% of branch visitors experienced all four service-related best practices—being greeted by name, offered help with financial needs, introduced to additional services, and thanked for their business—resulting in a missed opportunity to further enhance customer satisfaction.
Risks of attrition
Despite the overall improvement in satisfaction, customer retention remains a challenge for Canadian banks. High fees and poor service experiences were the top reasons cited by customers considering switching banks, with promotional offers from competitors also contributing to potential attrition.
The study also highlighted the importance of improving customer experiences in both digital and branch settings to maintain loyalty and trust, as branch service could lift customer satisfaction by 109 points.
The 2024 Canada Retail Banking Satisfaction Study examines customer satisfaction across seven factors: trust, people, account offerings, flexibility in banking methods, saving time and money, digital channels, and problem resolution. The findings are based on data collected from two waves of surveys conducted between January and July 2024, involving 14,460 retail banking customers.
J.D. Power, a global leader in consumer insights, has been analyzing customer interactions across industries for over 55 years, using advanced analytics and data modeling to help companies improve their customer-facing strategies.
