Charles Schwab, Ally and Discover fill the top three places in JD Power’s ranking of the best US digital banks.
Direct or branchless banks continue to significantly outperform traditional US retail banks in overall customer satisfaction according to the survey.
However, the highest-ranked best US digital banks operate distinct business models. And they take very different approaches to customer interaction.
“Direct banks are performing better than traditional retail banks across every comparable factor we evaluate, says Bob Neuhaus, VP Global Financial Services, JD Power.
“Even in areas like communication and problem resolution, where one might intuitively think traditional retail banks would have an advantage.
“What’s most interesting in this study, though, is that the top three performers have taken decidedly different paths to market. Charles Schwab, Ally and Discover deliver high levels of customer satisfaction in different ways. This shows that there is more than one recipe for success in this rapidly growing market.”
Best US digital banks outperform incumbents
The overall satisfaction score for direct banks is 860 (on a 1,000-point scale). This score is 53 points higher than the overall satisfaction score for traditional branch-based retail banks according to JD Power.
Charles Schwab Bank ranks highest in overall satisfaction with a score of 865, just ahead of Ally with 864. Discover ranks third with 860 ahead of E Trade and State Farm each with 850. Capital One (843) and Axios (811) round off the top of the best US digital banks survey.
The largest performance gaps are in the areas of products and fees; communication; and problem resolution.
The study’s three highest-performing direct banks have roots in decidedly different businesses. This ranges from wealth management to credit cards. Yet all deliver stand-out levels of customer satisfaction, with scores ranging within 5 points of one another.
Charles Schwab Bank performs well in website satisfaction. Second-ranked Ally Bank performs significantly higher than average on competitiveness of interest rates.
And third-ranked Discover Bank has the greatest year-over-year improvement of any brand in the study. This is driven by gains in assisted online support, new account opening experience and interactive voice response banking.
Best US digital banks: direct bank customers skew younger
More than one-half of direct bank customers (61%) hail from Generations X, Y and Z. On the other hand, those age groups account for only 45% of customers of traditional retail banks.
Direct bank customers are also more likely to use mobile payment apps than traditional retail bank customer (66% v 49%).
The US Direct Banking Satisfaction Study is now in its third year. It measures overall satisfaction with direct banks based on five factors. In order of importance these are: channel activities; products and fees; communication; new account opening; and problem resolution.
JD Power’s comments relating to USAA are worthy of note. USAA has served the military community and their families since 1922 and regularly tops consumer surveys for customer service excellence. It is profiled but, says, JD Power “USAA is not eligible as it does not meet the study award criteria.”
For the record, USAA scores 899 and if included would easily top the survey.