U.S. banks’ customers are the happiest in the world, according to a new report. The Banking Disruption Index from global digital transformation company GFT finds that 42% of U.S. consumers claim to be very happy with their bank. While U.S. banks can take comfort in the fact that their customers are happier than those in other countries, the Banking Disruption Index also warns of the majority (58%) who claim their banks could be doing more to ensure their complete satisfaction.
Traditional banks are still figuring out their roles in a new ecosystem that now includes fintechs and digital challengers who are vying for the same customers. With so many new financial experiences to choose from, even banks that have dominated the market for years are questioning where to put their focus in order to win—and hold onto—customers. These challenges have been exacerbated by recent events, such as the collapse of Silicon Valley Bank, that have called the entire financial industry’s stability into question.
GFT surveyed 2,000 U.S. consumers, and another 10,000 consumers across the UK, Germany, Italy, Japan and Poland, to understand how the current financial landscape is impacting consumers’ sentiments towards banks. It found that, where many banks are falling short on both digital and traditional banking features, they can largely make up for with one thing: Trust.
U.S. consumers like their banks more than consumers in other countries around the world.
While GFT found that consumers stateside like their banks more than their counterparts around the world, it also revealed that a majority of Americans are not necessarily satisfied with their banking experiences. Regardless, the report reveals that most are not proactively looking to replace their banks.
- Despite leading in the ‘very happy’ category, U.S. banks aren’t satisfying a majority of their customer base. While 42% of U.S. consumers claim to be ‘very happy’ with their current main banking provider, this leaves over half (58%) who aren’t.
- German consumers rank as the most unhappy. Five percent say they are ‘very unhappy’ compared to 2% in the U.S., 2% in the UK, 3% in Italy, 1% in Japan, and 1% in Poland.
- Despite their unhappiness, consumers don’t actually want to change banks. Only 14% of consumers around the world say they’re looking to change banks, and 70% are firm on not making any changes. Banks also have an opportunity to win over the 16% who are undecided.
- Consumers want the best of both worlds with digital and traditional banking features. Among the features that consumers consider “non-negotiable” in their banking experiences, fraud protection (49%) and an easy-to-use-digital banking app (47%) are in highest demand globally. Human communication is also highly important in the U.S. (35%).
Regulations are banks’ secret weapon in growing consumer trust.
The Banking Disruption Index reveals a distinct correlation between Americans’ relatively high level of satisfaction with their banks and their increased trust in banks over the past year. It also highlights opportunities for banks to strengthen their less satisfied customer base with trust-building features.
- In the U.S., liking banks is an effect of trusting banks. When asked to rate their level of trust in banks compared to a year ago, half (50%) of Americans said that their trust in banks remains the same. Notably, more than a quarter (28%) trust banks even more now than last year.
- High consumer trust is due in large part to secure, regulated experiences that digital challengers can’t offer. For instance, being insured by the Federal Deposit Insurance Corporation (FDIC) is one of the most important factors that U.S. consumers say establishes their trust in a bank (39%).
- Especially during economic uncertainties, transparent, supportive banking experiences can build trust. Forty percent (40%) of Americans say that low or no banking fees lead them to put trust in a bank, along with being able to reach customer service 24/7 (32%).
- Americans need more education around emerging concepts like open banking. While 52% of global consumers say they’ve heard the term “open banking,” 76% don’t see how it benefits them. Rather than focusing on defining the term itself, banks can build trust by educating consumers on the benefits of being able to participate in regulated programs that result from open banking.
“As recently as last year, U.S. consumers weren’t sure whether it would be traditional banks or fintechs managing their money for the long haul,” said Marco Santos, CEO Americas at GFT. “Just a year later, new regulated programs such as FedNow, as well as forthcoming open banking initiatives, have given banks the gravitas to establish that they aren’t going anywhere. Now, they just need the digital infrastructures to be able to participate in these programs, and then test and launch new offerings quickly.”
The complete U.S. Banking Disruption Index offers an in-depth look at how well banks are delivering on the needs of their existing customers, and where they can improve to attract new ones. The full report is available to download here.
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