JD Power Poll: Direct Banks Gain Popularity Through Customer Service

Direct Banks, digital branchless alternatives to traditional retail banking, continue to grow in popularity, in large part due to ‘superior customer service’, according to findings from the State Direct Banking Satisfaction Study. States of JD Power released today.

A majority of checking and savings customers (88%) said it was easy to do business with their direct bank, and 85% said their accounts had no hidden fees. Only 6% of checking and savings customers say their direct bank does not put the customer’s interests first. Among checking and savings customers, 59% say they have never had a problem or complaint with their direct bank. Of customers who had an issue/complaint in the past 12 months, 83% said it was convenient to contact customer service and 88% said their most recent issue was resolved.

“Today, 27% of banking customers in America use online banking alone,” said Paul McAdam, senior director of banking intelligence and payments at JD Power. “As much of our lives continue to shift to digital providers, direct banks have been in a unique position to gain market share and mind share by offering round-the-clock access, as well as products which have attractive fee structures and interest rates”.

Neobanks — online-only banking service providers without federal banking charters that use white-label agreements to provide FDIC-insured accounts — continue to win customers who tend to be younger, less financially secure, and older. sensitive to bank charges, according to the survey. Neobanks lag direct banks in most key factors assessed in the study, but show strong performance in areas such as personalization and innovative technologies.

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