Bank customer satisfaction waning amid high fees, less service

Canadians' satisfaction with their banks is in decline, with customers saying they have noticed higher fees but less service at their retail branch and on the phone.

The annual J.D. Power study of Canadian retail banking found that satisfaction with the big five banks has declined 12 points from 2014 to a ranking of 737 (out of a scale of 1,000).

Record profits for retail banks in Canada are being achieved at the expense of customer satisfaction, according to Jim Miller, senior director of the banking practice at J.D. Power.

"When a retail bank increases fees and trims back on its core services to customers for the sake of increasing profits, they may be losing touch with one of the most important aspects of their business survival — the customer," Miller said in a news release.

So while they continue to make money, banks may be eroding their own customer base, he said.

He said customers will only wait for a limited time in lineups or on the phone before they start to reassess where they want to bank.

Some may move to low-cost competitors, some of which provide great customer service, he said.

Satisfaction among customers of mid-size banks — including Tangerine, PC Financial and ATB Financial — is higher than those of the big banks by an average of 759, down 7 points from last year.

The 2015 Canadian Retail Banking Customer Satisfaction Study is based on responses from more than 14,000 customers who have bank accounts and answered questions as part of an online panel in April 2015 and May 2015. J.D. Power does the research itself.

J.D. Power measures customer satisfaction by ranking seven factors: product, self-service, personal service, facilities, communication, financial adviser and problem resolution.

One of the areas of dissatisfaction was monthly maintenance fees for chequing accounts, with 46 per cent of big five bank customers indicating they pay such a fee and that the average fee has increased year over year to $13.15 from $12.18. Among mid-size banks, just 25 per cent of customers paid a monthly maintenance fee in 2015.

Many of the banks raised service fees this year as well as decreasing the number of free services. After an outcry from customers, Royal Bank was forced to abandon a plan to charge fees to pay bills for its own credit cards as well as fees for mortgage payments. 

Another area of dissatisfaction was wait times. The average wait time to see a teller in a branch has increased to 5.7 minutes in 2015 from 3.8 minutes in 2014, and the average wait time to talk to a live phone representative has increased to 6.5 minutes from 3.7 minutes.

Among the big five banks, TD has the highest level of customer satisfaction for the 10th year running. Among the mid-sized banks, the one with the best record is Tangerine.