Nearly Two-Thirds of Retail Bank Customers Are Struggling Financially
TORONTO — The economic pressure caused by inflation, capital markets volatility and rising interest rates has put its mark on bank customers in Canada, with nearly two-thirds (66%) being classified as financially unhealthy,1 according to the J.D. Power 2023 Canada Retail Banking Advice Satisfaction Study,SM released today. The study also finds that, while personalized financial advice can elevate customer satisfaction and engagement with retail banks, only 42% of customers recall receiving advice from their financial institution and only 50% of those customers found the advice to be effective. Furthermore, overall satisfaction with banking advice declines 4 points year over year to 588 (on a 1,000-point scale).
“Canada’s large banks should be more attuned to their customers’ financial state and needs, offering and tailoring advice that is aligned with their financial challenges and tied to their future financial goals,” said Jennifer White, senior director for banking and payments intelligence at J.D. Power. “During times of financial hardship, customers are looking for guidance. Delivering advice can increase customer trust by 9 percentage points, and when the advice is completely personalized, trust rises 15 percentage points. Unlike their U.S. counterparts that demonstrated an improvement on that front,2 Canadian banks have yet to rise to the occasion and are still lagging in delivering the right advice at the right time to make a positive impact on their customers’ satisfaction.”
Following are some key findings of the 2023 study:
- Financial state tied to satisfaction: The study finds a correlation between customers’ financial state and satisfaction with their bank’s advice. Satisfaction among those who are considered financially healthy is significantly higher (657) than among those who are considered financially stressed (562) or vulnerable (500).
- Advice personalization: The top