Direct challenger banks are outperforming traditional retail banks in customer satisfaction, but are running into problems with responding to a surge in call center requests, according to research by J.D. Power. 

The 2020 J.D. Power U.S. Direct Banking Satisfaction Survey reveals challenger banks have been taking market share from traditional retail banks, particularly among younger consumers. The survey, however, also reveals direct bank customers have complained of long hold times when trying to get help, and that the call center interaction is crucial as these banks do not use in-person branches, according to a press release.

"While direct banks are delivering high customers satisfaction, they have challenges in key areas such as call center operations, new client onboarding and consistent digital engagement," Bob Neuhaus, vice president of financial services intelligence at J.D. Power, in the release. "Getting the formula right on customer service and client communications will be particularly important as direct banks contend with the fallout of COVID-19 pandemic in terms of account servicing and a significantly lower interest rate environment."

Cover image: JD Power