Customers Less Loyal to Retail Banks: JD Power

Why It Matters

The growing propensity for customers to spread deposits across multiple banks threatens traditional deposit‑base stability and forces retailers to sharpen every touchpoint to retain revenue.

Key Takeaways

• Overall satisfaction up to 657, but touchpoint scores falling.
• Average customer holds three checking accounts across banks.
• 20% shifted money from primary bank in last three months.
• Under‑40, affluent, and financially healthy customers switch most.
• National banks close problem‑resolution gap with midsize rivals.

Pulse Analysis

The JD Power findings underscore a broader shift in retail banking where customers no longer view a single institution as a lifelong home for their finances. This “soft switching” is driven by the proliferation of digital‑only banks, fintech platforms, and the ease of opening accounts online, creating a competitive environment where convenience and speed outweigh brand loyalty. Banks that once relied on legacy relationships must now compete on a per‑interaction basis, ensuring that phone, branch, and digital channels deliver consistent, high‑quality service.

Demographically, the study points to under‑40 consumers, the affluent and those with strong financial health as the most likely to redistribute their deposits. These segments typically command higher balances and generate greater fee income, so their migration can materially impact a bank’s net interest margin and cross‑selling opportunities. The trend also signals that traditional metrics of satisfaction may mask underlying churn risk; while overall scores rise, declining satisfaction in specific touchpoints can foreshadow future fund outflows.

In response, banks are doubling down on omnichannel excellence and problem‑resolution capabilities. National banks have boosted their resolution scores by 49 points since 2024, narrowing the performance gap with midsize peers that have seen a decline. Institutions that treat routine interactions—such as alerts, transfers, and fee disclosures—as moments to reinforce clarity and confidence are better positioned to retain customers. Strategic investments in AI‑driven support, streamlined branch experiences, and transparent fee structures will be critical for banks aiming to curb soft switching and protect their deposit base.