For consumers, big might not always be better when it comes to banking.
Customer satisfaction has fallen at Canada’s largest banks, according to a new study, while mid-sized lenders saw their satisfaction rate jump.
The survey by global analytics company J.D. Power asked some 14,000 retail banking customers of Canada’s Big Five banks — BMO, Scotiabank, CIBC, RBC and TD — and mid-sized lenders about their experiences with the financial institutions.
Overall, the Big Five’s customer satisfaction score fell seven points since last year on a 1,000-point scale to 604. At the same time, mid-sized lenders such as Tangerine, Simplii Financial and Desjardins saw a five-point rise to 649.
And while the Big Five still dominate Canadian banking in terms of market share, customer loyalty appears to be wavering.
The percentage of customers who switched their primary banking relationship in the past year rose to seven per cent, up from 6 per cent during the previous three years, according to the survey.
“Customers are open to looking elsewhere,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power.
“There is going to be a growing threat of customers leaving to go to the online-only providers,” he added, pointing to the rising popularity of fintech shops such as Wealthsimple and KOHO.
“Because they generally have no fees and very customer-friendly features.”
RBC, BMO, CIBC and Scotiabank declined to comment for this story. TD did not respond to the Star’s request for comment.
In a statement, Adriana Vega, executive director of industry group Fintechs Canada, highlighted the need for more competition and focus on the consumer in the financial services sector.
“Fintechs and mid-sized banks are often at the forefront of improving customer experience,” said Vega, “whether that’s through faster onboarding, more transparent pricing, innovative digital services, and offering a seamless customer experience so that customers have to troubleshoot less of the time.”
Respondents of the J.D. Power poll were generally more unhappy with the Big Five’s digital platforms as well as their processes of opening new accounts.
The satisfaction score for the big banks’ online chats, which are increasingly powered by AI chatbots, fell 19 points on the scale, McAdam said. He added that people cited issues with timeliness and the knowledge of the chat support.
Satisfaction with the mobile app dropped seven points while online banking’s score declined 10 points.
However, the banks seem to be addressing customers’ complaints more efficiently.
“The banks are getting better at single-contact and single-day problem resolution,” said McAdam. “Customers like that.”
RBC ranked highest in customer satisfaction among the Big Five banks for two years in a row. Among the mid-sized lenders, Tangerine Bank was the top bank for the 14th consecutive year.
