Increasing bank fees upset customers, but overall satisfaction with the industry is on the rise.
Financial institutions found increasing emphasis on service can help retain customers during the rapidly changing nature of the business.
The 2012 U.S. Retail Banking Satisfaction Survey by J.D. Power and Associates shows overall retail banking customer satisfaction climbed a scant 1 index point from 2011. The slight hike followed last year’s 4 point increase, which was the fi rst increase in three years.
Some banks will continue introducing new fees this year in an attempt to recover lost revenue from federal regulations, according to the 2012 U.S. Banking Sector Outlook.The report was published by Trepp, an analytics company that provides banking industry information.
The federal provisions include limiting what banks can charge for debit card transactions and the Credit Card Act, which prohibits over-the-limit fees and double-cycle billing.
To battle these headwinds, some banks are looking to other sources of revenue such as eliminating free checking and imposing account maintenance fees.
“The negative reaction to fees reflects customers’ irritation about paying for something they didn’t have to pay for in the past,” Michael Beird, director of banking services at J.D. Power and Associates, wrote in the study. “It also reflects a lack of their complete understanding about what they’re getting for those fees.”
Customers are also learning how to use new features in mobile and online banking.
The J.D. Power report shows mobile ba nking increased from 10 percent in 2011 to 16 percent this year.
John Dominick, a University of Arkansas banking professor, said fi nancial institutions have to fi nd ways to satisfy two types of customers: those who use technology and those who like to come in to a bank.
“People are so busy today, when you can eliminate a stop at a bank it is one less chore you have to do,” he said.
Fewer customers going into a branch should mean workers, specifi cally tellers, have more time and attention to give to each customer, Dominick said. But that is not always the case, he added, because some institutions will save money by eliminating positions.
No matter the situation, Dominick said there is an industrywide emphasis on customer service.
“One way to differentiate themselves is how they treat people,” he said.
Customer service is so important at Arvest Bank allnew employees must attend a two-day training seminar tackling the topic.
Alyssa Teed, an Arvest training specialist, taught “Customer Focused Banking: Culture Matters” to 22 employees last week.
“Arvest is all about building relationships with customers and with fellow employees,” she said.
The bank ranked highest in the J.D. Power survey for the South Central and Southwest regions. This marks the fourth year Arvest received a regional award.
Arvest is the state’s largest bank and the 87th largest in the nation based on deposits,according to J.D. Power. It has more than 5,000 employees at 241 branches in four states.
More than 6,600 people worked at 1,105 fi nancial institutions in Benton and Washington counties in September, the most recent data available from the Bureau of Labor Statistics.
Teed said the company’s goal is to create and develop delighted, fully banked, profitable, lifetime customers. Arvest off ers more than 300 products and services, she said, and though they may not be the customer’s only choice, they want to be the main option.
The average person bankswith three fi nancial agencies, Teed said.
“Our vision is to be the financial services provider of choice in the trade territories we serve,” she said.
Teed stressed to her class the importance of greeting customers.
“Little things make a big impact,” she said.
The industry has changed a lot in the past 10 years, Teed said. Banks have to show value and be proactive to beat competition.
“You can’t wait for the customers to come to you. We have to sell ourselves more,” she said.
Stephanie Rowe of Rogers said she likes Arvest because she feels welcomed when she enters one of the bank’s branches.
“I like the feeling when someone smiles at me right away and asks me how they can help me,” she said.
The J.D. Power surveyshowed the number of branches with greeters increased from 68 percent in 2010 to 76 percent this year.
Lindsay Ramsey, marketing director for the Bank of Fayetteville, said she has noticed rapid changes in the past three to five years. The increased use of online, mobile and debit cards require employees to answer a wide range of questions.
“We need to make sure we can take care of our customers,” she said.
Bank of Fayetteville has eight branches in Washington County.
Ramsey said they conduct a lot of one-on-one training.
She said they are fortunate to have many longtime employees who know the customers personally.
“The great thing about a bank our size is we are able to give customers more attention,” Ramsey said.
Employees need to be welltrained so they can teach customers how to use new services as they come out. Ramsey said it takes longer to open new accounts because of all the features that have to be explained to the account holder. She said it is worth it in the end to teach before questions arise.
Dominick, who is also a director at Signature Bank, said a staff member does the bulk of the training. The bank also uses online programs.
Signature Bank has branches in Bentonville, Fayetteville, Springdale and two in Brinkley.
Dominick said electronic banking is even more important in boosting customer satisfaction because Signature is not large and has few branches.
“More people could be utilizing mobile banking, but I expect it to pick up,” he said.
More customers also say they’re satisfied with credit unions. Rates hit an all-time high last year, according to the American Customer Satisfaction Index.
The report shows credit unions tripled their customer satisfaction lead over banks in one year.
“Banks are facing dift cult times on multiple fronts. Profits are being squeezed, regulators are more demanding, foreclosures remain problematic and consumers are fighting back on fees,” according to a news release quoting Claes Fornell, index founder.
He said data suggest credit unions and smaller banks have become an even more attractive alternative for consumers.
Gina Williams, chief executive oftcer at UARK Federal Credit Union, said her institution prides itself on off ering services available at banks.
“We are small enough to know our members but large enough to meet their needs,” she said.
She said the credit union has grown to just more than $44 million in assets in two branches.
Business, Pages 9 on 06/24/2012