Online banks build customer loyalty through personalized service

Photo (c) imaginima – Getty Images

Online banks, also called direct banks, do not have branches. Most of them don’t even have ATMs. But over the past two decades, these banks have grown in popularity by offering most of the services provided by their physical competitors.

“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”.

Over the years, the most successful brands have managed to find the right formula for personalization. In addition to lowering bank fees, direct banks have won favor with consumers by offering personalized customer service.

LC of Franklin Square, NY had a bad experience with his Ally Bank car loan. After leaving a negative review about the experience, the bank contacted them and was able to change their entire perception.

“I received a phone call from Sara, Account Manager for Customer Relations at Ally Auto,” LC wrote in a ConsumerAffairs review. “She has been with the business for a long time and we had an extremely pleasant conversation. She was patient, empathetic, compassionate, kind and asked me to give her time to review my situation.

LC said their issue was resolved within days. Their overall balance sheet of the bank became positive thanks to one of its employees.

Customer service can make the difference

Ally Bank ranks third, behind Charles Schwab and American Express, in JD Power’s 2022 Direct Banking Customer Satisfaction Survey. The survey revealed that customer service is the primary driver of consumers’ perception of their online financial institution.

Among current and savings account customers, 59% said they had never had a problem or complaint with their direct bank. Of customers who had a problem or complaint in the past 12 months, 83% said it was convenient to contact customer service and 88% said their problem was resolved. Eighty-eight percent of respondents said it was easy to do business with their direct bank, and 85% said their accounts had no hidden fees.

The survey found only a small minority of customers – 6% – who said their direct bank did not put their interests first. American Express, Charles Schwab Bank, Discover Bank, Ally Bank and Capital One rank high in this category, according to the survey.

Joseph P. Harris