Even though it's been seven years since the onset of the financial crisis, Americans still haven't forgiven the banks most responsible for the worst economic downturn since the Great Depression.
To be fair, sentiment toward banks in general has improved. In its latest survey of the U.S. retail banking industry, J.D. Power found that customer satisfaction with lenders is at a "record high as banks improve experiences for their customers, reduce problems, and create a better understanding of fees."
The performance of JPMorgan Chase (JPM 2.98%) serves as a case in point. The nation's biggest bank by assets scored better than the average bank across all nine of the regions in which it operates. It had a particularly strong showing in Florida, where customers gave it a score of 826 out of 1,000, making it the best-performing bank in the Sunshine State.
But despite this general improvement, some banks continue to "fall far short in meeting customer needs," says Jim Miller, director of banking services at J.D. Power.
At the top of this list is Bank of America (BAC 0.72%). While the nation's second-largest bank by assets performed consistently across regions, its performance was consistently poor. Customers ranked it below the average bank in every single one of the 10 regions in which it operates a retail branch network.
This was the worst performance of any big bank on the list. Even Citigroup, which needed a $40 billion bailout from the government to make it through the crisis, exceeded the average customer satisfaction score in two of the six regions in which it operates.
Perhaps most surprising is Bank of America's performance in its home markets of California (where its namesake Bank of America hails from) and the Southeast region, which includes its current headquarters in Charlotte, N.C.
In California, the biggest and most important economy in the United States, Bank of America ranked dead last, outpaced by fellow California native Wells Fargo (WFC 7.55%) and even a smattering of internationally owned lenders such as Rabobank, Bank of the West (owned by France's BNP Paribas), and BBVA Compass (a subsidiary of Spain's Banco Bilbao Vizcaya Argentaria).
While it's hard to pinpoint precisely why customers are so dissatisfied with Bank of America right now, it isn't unreasonable to think that the main problem dates to the bank's 2008 acquisition of Countrywide Financial.
At the time, Countrywide was the nation's largest mortgage originator. And at the time, it was also one of the most crooked. This unfortunate reality has since tainted the perception of customers since Bank of America acquired it -- although this isn't to say that Bank of America is entirely free of blame, given the laundry list of its own misdeeds.
Meanwhile, splitting the difference between JPMorgan's superior performance and Bank of America's dismal showing is Wells Fargo, the nation's fourth-largest bank by assets. Out of the 11 regions in which it operates, it scored below average in seven of them and exceeded the average in the remaining four.
At first glance, this seems to be at odds with Wells Fargo's long and distinguished history of being one of the most respected lenders in the United States. When you dig deeper into the results, however, it becomes clear that the California-based bank's shortcomings, not unlike Bank of America's, seem to derive from its 2008 acquisition of Wachovia.
In virtually every one of Wachovia's former strongholds -- namely, the Mid-Atlantic, South Central, Southeast, Texas, and Florida regions -- Wells Fargo came in below the average. By contrast, in its own traditional strongholds -- the Northwest, North Central, and California regions -- Wells Fargo exceeded the average.
Suffice it to say that there may be something to Wachovia's former nickname, "Walk-All-Over-Ya."
At the end of the day, it's easy for investors to think that customer satisfaction doesn't matter. But this simply isn't true. The fight among banks right now is for revenue. And the easiest way to increase revenue is to sell existing customers more financial products. This is a hard task in and of itself, but it becomes next to impossible if your customers don't like you.