Personalized financial advice has emerged as a key to a meaningful bank customer experience, according to the findings of a recent J.D. Power study. Financial advice is “resonating more than ever” with retail bank customers, but only 42% indicate recalling that their bank provides guidance.
The survey showed that for those who receive guidance, 76% act on it. “Customers who act on the financial advice and guidance provided by their bank are getting not only help on how to save time or money, but also these services result in increased satisfaction and strong engagement and brand advocacy,” said a J.D. Power banking and payments analyst, noting that as banks get more “savvy” about how to personalize content through AI and staff training, “recall and usage of financial advice is increasing, which is a very positive step forward for the industry.”
Recall of financial advice among younger customers exceeds the industry average, according to the study. Overall, 42% of retail bank customers recall receiving financial advice from their bank. Among customers under the age of 40, the average recall rate for financial advice jumps to 60%.
The most frequent actions taken in response to advice include updating account settings (25%), shifting money between accounts (22%) and downloading the bank’s mobile app (22%). Overall satisfaction with retail banking advice increases 163 points (on a 1,000-point scale) when customers act based on specific advice provided by their bank, though many banks “miss the mark” on consistent personalization, the study noted. One key variable with a “significant effect” on satisfaction is “received personalized banking advice/guidance.” When this is met, overall satisfaction increases 195 points and banks are moderately successful at achieving this goal with 63% receiving personalized content.
