Customer Service

Uncertainty By Consumers Could Affect Banks Brands

It’s A Time To Build Trust, Simplicity Says J.D. Power

Keith Griffin

June 2, 2020

Businesspeople talking | Photo by August de Richelieu from Pexels

Bankers may want to look more closely at how difficult it is to borrow money during this period of high unemployment and economic uncertainty. According to the J.D. Power 2020 U.S. Consumer Lending Satisfaction Study, lenders’ ability to build trust and provide seamless, easy-to-use online tools during this heightened period of consumer anxiety will define their brands for many years to come.

"Brand image is very important to consumers, and they’re making it clear that lenders need to foster trust in the brand and the lending experience," said Jim Houston, director of consumer lending intelligence at J.D. Power. "To accomplish that, lenders need to provide secure, easy-to-use web-based tools and focus on aligning product offerings and terms to the specific needs of their customers during this challenging period."

Key Findings of the 2020 study

Repayment terms and reputation are key drivers in lender selection: The two most important variables driving the selection of a consumer lender are repayment terms and reputation of the lender. Additional factors weighing heavily on the decision process are quick application and approval processes; the ability to speak with a live person via phone; and quality of mobile and digital capabilities.

Most customers plan to keep making payments on personal loans and HELOCs: Based on additional J.D. Power research conducted May 8-10 of this year, fewer than 15% of personal loan and HELOC (home equity line of credit) customers feel they will be unable to make their minimum monthly payments as a result of the COVID-19 pandemic. However, 42% say they feel the worst is yet to come in terms of the effect of the pandemic on their personal finances.

Documents are the enemy of customer satisfaction: The ideal number of documents required to apply for and receive approval for a consumer loan is zero. Overall satisfaction with lenders is 893 (on a 1,000-point scale) when no documents are required. That score falls to 865 when one or two documents are required.

Customers will consider alternative products: As the market for personal loans continues to gain new entrants from traditional retail, e-commerce and technology sectors, 58% of consumers say they did consider using alternative products for lending.

Study Rankings

  • U.S. Bank ranks highest among HELOC lenders in overall customer satisfaction with a score of 875. Chase (870) and PNC (870) rank second in a tie.
  • Lightstream ranks highest among personal loan lenders in overall customer satisfaction with a score of 891, followed by Marcus by Goldman Sachs (884) and Discover (877).

The J.D. Power U.S. Consumer Lending Satisfaction Study measures overall customer satisfaction based on performance in four factors: application and approval process; loan management; offering and terms; and closing (HELOC only). The study is based on responses from 4,370 personal loan and HELOC customers and was fielded in January-February 2020.

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