Dive Brief:

• Citi topped J.D. Power’s annual survey measuring customers’ satisfaction with the advice they receive from their retail bank. The nation’s third-largest bank’s score jumped 26 points to 852 on a scale to 1,000, edging out last year’s leader, Bank of America, which ranked second this year, with 851.
• Improvements to Citi’s online and mobile tools cemented its status as the favorite among Generation Y and Z respondents, J.D. Power said. About 36% of the 3,883 people surveyed in October and November said they received advice through digital channels such as web, app or email. But among Generation Z, that number rises to 51%, the research firm said.
• The nation’s five biggest banks took all but one of the survey’s top six spots. The outlier, BB&T, had merged with SunTrust since the survey was conducted to form the nation’s sixth-largest bank, Truist. BB&T tied for third in advice satisfaction with JPMorgan Chase at 840.

Dive Insight:

The embrace of digital advice comes at a time when banks are rethinking their physical presence. But strategies vary from bank to bank. Citi and JPMorgan Chase have both laid out plans for branch expansion, while Truist and PNC, for example, are consolidating their bricks and mortar, albeit in a measured manner.

Almost a third (31%) of new accounts are opened through a bank website or mobile app, up from 22% last year, according to J.D. Power. Meanwhile, 55% of new account openings are happening in branches, but that figure is plummeting 10 percentage points year over year, the research company found.

However, banks have struggled to consistently connect with customers for financial advice along digital channels until recently, said Paul McAdam, J.D. Power’s senior director of banking intelligence.

"Based on this year’s study results, it is safe to say we’ve reached the tipping point, where banks that get their digital formulas right are seeing strong gains in both adoption of and satisfaction with advice and guidance delivered via digital channels," McAdam said in a press release Thursday. "Within the next year, digital will surpass the branch as the most commonly used retail banking customer advice channel."

Indeed, customer satisfaction with banks’ digital advice increased 21 points, while face-to-face satisfaction rose only two, the survey found.

Overall satisfaction with retail bank advice increased 14 points to 833 from 819 last year, according to the survey. But the six biggest banks are widening the gap, seeing a 16-point jump, compared with an 11-point increase among the 11 regional banks the survey tracked.

U.S. Bank saw the greatest increase from last year — 52 points, from 782 to 834, to place it fifth. Only two banks scored lower this year than last. PNC, which ranked second last year with 833, dropped to 825. M&T Bank dropped three points to 787 to place last in this year’s survey. 

"Great financial advice is a key differentiator for retail banks at a critical moment in time when, according to our research, 41% of U.S. bank customers feel unsatisfied with their current financial condition and 39% are not confident they are doing everything they can to meet their long-term goals," Bob Neuhaus, J.D. Power’s vice president of financial services intelligence, said in the press release.

"The fact that banks are finding ways to resonate with customers as they move further along the continuum toward digital as their primary banking channel is encouraging, but banks are going to need to keep innovating to stay competitive in this fast-moving environment," Neuhaus said.