Bank customers want more financial advice, so banks need to find ways to deliver.
A J.D. Power study on Canadian retail banking finds that 87% of bank customers say they want financial advice. Of customers under 40 years old, nearly three in 10 (29%) say they’re “very interested” in receiving advice.
However, only one-third of these customers (33%) recall receiving advice from their banks.
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In a release, Paul McAdam, senior director of banking practice at J.D. Power, says Canadian banks have steadily improved customer satisfaction through investment in technology. This helps them provide greater banking convenience and more consistent products and services.
One challenge is improved satisfaction has left customers wanting more.
“The industry’s service improvements have led more customers to view their retail bank as a viable provider of advice,” says McAdam.
“In response, many banks are increasing their emphasis on providing practical advice and guidance to help customers gain greater control over their finances and meet specific financial goals,” he adds. “The challenge for banks is getting the advice formula right and delivering it in a personalized manner across all channels—not only at the branch, but also via the website and mobile app.”
However, clients might not know what advice they most need.
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In the study, almost half of clients (47%) say they want investment advice, while only 32% say they want advice to help keep track of spending and household budgets. The latter is arguably more helpful in developing long-term financial success.
Read: What happens when advice breaks up with investments
Here are other common types of advice that bank customers seek:
- quick tips to help improve their financial situations (45%);
- retirement advice (42%); and
- in-depth financial reviews (30%).
Read: 25% of Canadian retirees live with debt: survey
Face-to-face advice for the win
Among bank customers who received advice from their banks, 90% say they benefited from the information, and 60% who received face-to-face advice say that advice met their needs.
That number falls to 37% among customers who received advice digitally (via a bank’s website or mobile app), and to 35% among those who received advice via email.
(More than half—58%—of customers say they want to receive advice through banks’ websites and mobile apps, but only 10% received advice in these ways.)
Among individual customers who said they’re highly satisfied with the advice provided by their banks (that requires advice satisfaction scores of 900 or higher on a 1,000-point scale), 89% said they have a high level of trust in their banks. Also, 92% of this group say they “definitely will” reuse their banks for another product.
But overall, with all client satisfaction scores accounted for, none of the big five banks rated that high. RBC came out on top, with an average customer satisfaction score of 803, followed by CIBC (793), BMO (789), Scotiabank (788) and TD (780). The industry average score was 791.
About the survey: The 2018 Canada Retail Banking Advice Study surveyed 1,804 retail bank customers in Canada who received any advice/guidance from their primary banks regarding relevant products and services or other financial needs in the past 12 months. The study evaluated retail banking advice satisfaction with the five largest Canadian retail banks and it was fielded in November-December 2017.
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