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Customer survey puts local banks to the test

How satisfied are retail customers with their banks?

It’s a question that J.D. Power and Associates aims to answer each year with a retail banking satisfaction survey that asks about everything from fees to product offerings to problem resolution.

M&T and First Niagara Financial Group were two of the 30 banks included in J.D. Power’s mid-Atlantic rankings. M&T tied for No. 17. Its score slipped by 11 points from last year but was still 5 points above the regional average. First Niagara ranked No. 21; its score was 13 points higher than last year, but still 3 points below the regional average. The regional average increased by 4 points from a year ago.

First Niagara was pleased its score went up but sees room for improvement, said Scott Fisher, First Niagara’s managing director for retail channels and wealth. He described J.D. Power, along with Gallup, as akin to the “Good Housekeeping Seal of Approval” for the banking industry and the customer service experience.

“We’re not satisfied; we’re not where we want to be yet,” he said. Fisher noted that the bank’s president and CEO, Gary M. Crosby, has emphasized making First Niagara a “customercentric” organization.

To that point, Fisher said First Niagara is using J.D. Power’s services to conduct more in-depth research. The bank launched a pilot program at 50 branches, surveying customers who just did some kind of transaction, or who had contact with a customer service center employee. “That way, individual branches and contact center teammates will be scored on their interactions,” he said. First Niagara will expand the program companywide in the third quarter.

“I think this is putting your money where your mouth is,” Fisher said. “If you’re going to be a customercentric organization, you have to have a culture that supports that, but you also have to have data.”

Two or three years ago, many of the customer complaints that First Niagara received were about their online banking experience, Fisher said. “That’s dropped off big time,” he said. “You like to see that there’s a linkage between what you invested in, what you focused on and what kind of outcome you’re getting from it.”

In a statement, M&T commented on its showing in the survey: “Our most important measure of customer satisfaction is gained through the daily interactions our 15,000 employees we have serving our customers, which we look to corroborate and supplement with reports from J.D. Power, Greenwich Associates and others. Overall we’re very pleased with the results we see, and we’re always striving to understand what’s important to our customers.”

J.D. Power’s survey was based on responses from 80,000 retail banking customers of more than 130 of the largest banks in the United States. The highest possible score was 1,000, but when customers are asked about their satisfaction with unpopular things like fees, it can be hard to earn maximum points on every question, said Jim Miller, senior director of banking at J.D. Power.

In the mid-Atlantic rankings, the top score belonged to Pennsylvania-based Susquehanna Bank, which BB&T is acquiring. Under J.D. Power’s “power circle” rating system, Susquehanna was the only bank of the 30 to achieve five-circle status, which was defined as “among the best.”

Both M&T and First Niagara earned three-circle status in the survey, which translated to “about average” in J.D. Power’s eyes.

Finishing No. 4 in the mid-Atlantic rankings, with an 807, was Hudson City Savings Bank, M&T’s partner in a long-delayed planned merger.

Miller said of M&T’s 790: “They’re still trying to close the Hudson City deal, dealing with a number of regulatory issues. I would suspect that it’s harder to make progress when you have to deal with some of those other absolutely critical issues at the same time.”

Of First Niagara’s 782, Miller said: “They are focusing on the branch experience but also focusing on technology. I suspect we have not really seen a lot of the benefits from the technology improvements yet.”

Part of what drives the survey scores is customer expectations, Miller said. Over time, he said, customers give credit to banks for new features that make their lives easier, such as more-advanced ATMs or the ability to deposit checks via smartphone. But Miller said that the rate of change in the industry has slowed and that variations between banks is not as great.

“Now, customers expect the next ‘wow,’ ” he said, “and at least as an industry, right now, we’re not providing the next big thing that customers are looking for.”