Author: Johan Moreno

Debit Cards Still Lead in Customer Satisfaction and Utilization, Even as Use of Digital Wallets Grows

Banking and Payments Intelligence Report
May 2024

Debit Cards Still Lead in Customer Satisfaction and Utilization, Even as Use of Digital Wallets Grows

While digital wallets continue to grow at an astonishing pace, the debit card is still king when it comes to overall utilization and customer satisfaction, according to JD Power data.

This Banking and Payments Intelligence Report dives into the findings of the JD Power 2024 Debit Card Satisfaction Study to spotlight the prevailing sentiment and emerging trends in debit card usage, and how that may change with the continued uptick in the adoption of digital wallet brands.

Debit Cards Still Reign Supreme

Overall, 72% of customers say they use a debit card at the point of sale, either by tapping, dipping, or swiping their card in person or entering their account number online or in a mobile app. That’s higher than all other payment methods, including cash, credit cards and digital wallets. Debit cards also have the highest proportion (68%) of customers with a favorable impression of the payment method when compared with other forms of payment, such as credit cards, digital wallets and buy now pay later (BNPL).

Customers under 40 years old continue to be the most likely users of debit cards (82%) and most likely to have a favorable view of debit cards (77%). Debit card providers that perform particularly well in the under-40 segment include Capital One, Chase and U.S. Bank.

Top Issuers Thrive on Fees and Security

While debit cards boast impressive marks, there is a wide variation of satisfaction level with debit card issuers among customers that use their cards at the point of sale. Notably, there is an 85-point (on a 1,000-point scale) difference between the top- and bottom-ranked issuers. Scores are most influenced by customer opinions about the reasonableness of fees and services charges and purchase limits.

Security is also critically important to debit card users. Issuers whose customers say they keep them completely informed about security policies/protections receive the greatest boost in overall performance. BMO, Capital One, Citi, and Huntington all deliver strong results in the security dimension.

Maintaining an Edge

While debit cards are maintaining their relevance in an increasingly crowded payments marketplace, we do expect that as digital wallets grow in popularity, there will be a slow deterioration in the share of customers tapping, dipping, or swiping their debit cards at the physical point of sale and manually entering their debit card information into a web or mobile check-out over time.

The decline in debit usage will not necessarily result in less debit card spend for issuers. That’s because debit cards are used more often in digital wallets than credit cards. The risk for issuers is that customer affinity with their brand will likely take a hit as shoppers associate transactions with the wallet provider (say, Apple) instead of their issuer. After all, when a customer uses a digital wallet, the ease of use and positive connotations they feel is attributed to the technology company behind the wallet, not the debit card.

Early Warning’s new Paze digital wallet represents an interesting strategy for overcoming that challenge by enabling the participating debit card issuing banks to retain brand relevance and the customer relationship within the digital wallets ecosystem. Our data shows that consumers who prefer to pay with debit are also more likely to be digital wallet users. Issuers that offer Paze and encourage their active debit card users to enroll should benefit most from a combination of continued spend and brand recognition.

At the physical point of sale, the challenge to debit card issuers will continue to be: How can they reinforce the value of their brand to customers who are increasingly reaching for their phones instead of their cards. Issuers will have to find new ways to make themselves indispensable to the customer, possibly by focusing on value-added experiences related to budgeting, security, or rewards, all of which have strong influence on debit card user satisfaction when delivered well.

One thing is for certain: the status quo only stays that way for so long. It’s up to debit card issuers to adapt to this environment or face losing their top-of-wallet position and brand relevance at the point of sale.

Find out More

This Banking and Payments Intelligence Report is based on responses from the JD Power 2024 Debit Card Satisfaction Study, which included 7,756 responses and was fielded from September through November of 2023. It is authored by Sean Gelles, senior director, payments intelligence, and Miles Tullo, managing director of banking and payments at JD Power. Please contact us at the numbers below to connect with Mr. Tullo or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

VIDEO: Financial Services Intelligence Update — May 2024

With a remarkable surge in the use of P2P transfers, the May edition of the Financial Services Intelligence Update dives into JD Power’s newest research – the JD Power U.S. P2P Transfers Satisfaction Study. Over half of U.S. consumers have embraced P2P transfers, with a 10% rise in usage since Q3 2023.

In this video, Miles Tullo invites Sean Gelles, Senior Director of Payment Intelligence, to shed light on what matters most to customers when it comes to building loyalty and authority in the P2P landscape, as well as surprising brand performance observations on Venmo, PayPal, Cash App, and Zelle.

Here’s a rundown of the top moments showcased in the video.

Driving Factors of P2P Transfers Satisfaction

Maintaining customer satisfaction is paramount in deterring defection to new digital payment platforms. The key factors driving satisfaction with P2P transfers, ranked by importance, include:

• Account management through mobile apps
• Ease of money transfer
• Account linkage
• Security of funds and personal data
• Ease of receiving funds
• Customization of user experience

Brands excelling in these areas are reaping the rewards of exceptional customer loyalty. Only 8% of P2P users say they “definitely will” or “probably will” switch the brand they use for sending money in the next year.

JD Power U.S. P2P Transfers Satisfaction Study

The JD Power U.S. P2P Transfers Satisfaction Study offers an in-depth analysis of consumer satisfaction with brands providing digital money transfers between individuals. It encompasses valuable data on consumer behaviors, preferences, adoption strategies, and competitive benchmarking. Learn more about this study.

About Sean Gelles

Sean Gelles is a seasoned professional with 20 years of experience in consumer analytics, particularly in the payments industry. At JD Power, he spearheads research on various payment methods, aiming to enhance client competitiveness. Prior to this, he led analytics teams at American Express, leveraging customer data for improved digital experiences and revenue growth. Gelles holds degrees from Northwestern and Cornell University.

Follow Sean on LinkedIn

About Miles Tullo

Miles Tullo is the Managing Director of the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients. 

Follow Miles on LinkedIn

With Savings Account Balances Dropping, Customer Concerns over Rising Prices Intensify

Banking and Payments Intelligence Report
May 2024

Leveling Out

While customers’ financial health has seen gradual improvement over the last six months, the changes are modest. Nearly one-third (32%) of respondents are financially healthy, while 43% fall into the vulnerable category. This stabilization reflects a certain acceptance of the current economic landscape.

While there may be acceptance, there is palpable uneasiness about managing inflation. Three-fourths (75%) of bank customers say that the cost of goods is increasing faster than their income and 42% are extremely worried prices for goods they use every day will increase in the next three months. Those figures both reflect the highest level observed in the past six months.

All Dried Out

That worry is likely a reflection of how much—or how little—liquidity bank customers currently have on hand. More than half (53%) of customers have less than $4,000 in their primary deposit accounts.

Interestingly, having a higher deposit level does not guarantee financial health. When asked about their deposits at their primary bank, 29% of healthy customers said they had between $10,000 and $49,999 on deposit compared with 26% of customers in the overextended category and 16% in the stressed category.

The Search for Higher Yields

To combat these concerns about funds, some bank customers have begun to shift their money from their primary bank to another institution often seeking to earn as much as possible. Overall, 22% said they have moved money from their primary bank shifting one-third of their deposits. This rate is highest among customers in the overextended category.

When asked why they moved their funds, some were required to make moves but among those choosing to shift deposits 42% said higher interest rates and cash back or other rewards (19%). Overall, 40% of primary savings customers earn less than 1% APY on their money, while 23% do not know what their savings interest rate is. This means there are some savvy customers taking advantage of current high interest rates to help grow their money, but a large portion are not making these money moves.

Chartering New Territory

While customers try to navigate the next phase of a very uncertain economic landscape, they are going to be on the hunt for any way they can gain an edge. Whether that’s a loan product, budgeting tools, or higher interest rate accounts, more customers than ever before are willing to test waters with banks both new and familiar.

That means that there is not only a need for more proactive customer engagement, but also an opportunity to help customers through a time of great stress. For banks willing to offer higher yield accounts, they have the potential to coax a lot of new business through the doors and, if done properly, convert that new business into long-lasting relationships.

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in April 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

 

Are Recent Improvements in Public EV Charging Infrastructure Enough to Reverse Negative Consumer Perceptions? And What Will That Mean for Tesla?

E-Vision Intelligence Report
May 2024

Are Recent Improvements in Public EV Charging Infrastructure Enough to Reverse Negative Consumer Perceptions? And What Will That Mean for Tesla?
 

Key Findings

• Customer Satisfaction with Public Charging Infrastructure Surges in Q1 2024: Consistently, for the past four years, the top reason consumers cite for not considering an electric vehicle (EV) is lack of charging station availability, and bad experiences with out-of-service equipment, failed payment systems and difficult-to-access charger locations are the most common complaints of EV owners. That trend may be starting to shift, however, as customer satisfaction with public DC Fast Charging (DCFC) and public Level 2 charging networks has improved dramatically in the first quarter of 2024.
• Non-Tesla Public Charging Networks Lead Customer Satisfaction Improvement Trend: While Tesla has historically been the sole EV manufacturer to deliver a consistently positive public charging experience through its proprietary charging (Supercharger) network, the significant gains in customer satisfaction with public charging networks in the first quarter of 2024 are being driven by non-Tesla networks.
• Supercharger Network Central to Tesla Brand Appeal: The recent management upheaval within Tesla’s Supercharger team has put a spotlight on the importance of the network to the overall Tesla brand. According to JD Power data, the top five EV models for which “charging station availability” is cited as a primary driver of purchase consideration are all Teslas.

Executive Summary

Could the biggest stumbling block to widespread electric vehicle (EV) adoption soon be fading? Lack of charging station availability has been the number one reason provided by EV rejectors for the past four years and customer satisfaction with non-Tesla public charging networks has been trending down since the second quarter of 2022. Now, however, that trend seems to be changing course. How will that affect consumer perceptions of EVs and what does it mean for Tesla, which has been the lone bright spot in the U.S. public charging infrastructure?

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

Public Charging Customer Satisfaction Surges

Overall customer satisfaction with U.S. public charging infrastructure has climbed significantly in the first quarter of 2024. Customer satisfaction with DCFC charging is 663 (on a 1,000-point scale), which is up 16 points from Q4 2023, and customer satisfaction with Level 2 charging is 610, which is up 9 points from Q4 2023. These mark the largest quarter-over-quarter increases in satisfaction with public charging since JD Power began collecting this data in 2021.

Significant improvements are noted with the speed and ease of charging and the overall availability of chargers. Perhaps most importantly, though, the number of charging failures experienced due to station outages and equipment malfunctions has declined from 71% in Q4 2023 to 59% in Q1 2024. 

 

Non-Tesla Charge Point Operators Drive Satisfaction Improvement

Notably, these quarterly improvements in DCFC customer satisfaction were not driven by the consistently strong performance of the Tesla Supercharger network. While Tesla’s network does still have the highest overall levels of customer satisfaction, its topline score has declined for the past two quarters. The big improvement in overall customer satisfaction in Q1 was driven by a 19-point quarterly gain for the non-Tesla DCFC networks.

How Important Are Consumer Perceptions of Public Charging Networks?

The rapid improvement in performance among non-Telsa charging networks, coupled with the recent management upheaval in Tesla’s Supercharger division, begs the questions: Can improvements in the non-Tesla charging infrastructure change consumers’ negative perceptions about public charging? And, what effect will that have on Tesla, a brand that has grown in lockstep with its Supercharger network?

To start the process of answering those questions, we point to two important pieces of data. First, there is the size and scale of the current U.S. public DCFC infrastructure. According to the Department of Energy’s Alternative Fuels Data Center, there are currently 42,327 DCFC ports in the United States. Of those, 25,635 (61%) are Tesla Superchargers. Non-Tesla ports account for the remaining 39%. While Tesla is the clear leader in the DCFC charging game, Tesla’s share of the fast-charging market is not set in stone. By opening access to its North American Charging Standard (NACS) to other manufacturers, Tesla may see its overall share of the market decline. With the right level of investment in expansion and continued improvements in customer satisfaction, competitors such as Electrify America, ChargePoint and others could pose a real challenge to the Supercharger network.

The second important variable here is the critical role that the Supercharger network plays in overall Tesla brand appeal. Currently, the top five EV models for which “charging station availability” is cited as a primary driver of purchase consideration are all Tesla vehicles. Specifically, among vehicle shoppers considering a Tesla Model Y, 36.4% have listed “charging station availability” as one of their top five reasons for considering that specific vehicle. That trend continues for shoppers considering the Cybertruck (32.8%), Model 3 (32.2%), Model X (28.5%) and Model S (27.2%). Should Tesla’s Supercharger network experience a significant setback or increased competition from challenger brands, it could have a significant effect on a core component of the brand’s value proposition.

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2024 U.S. Electric Vehicle Experience (EVX) Ownership Study, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study.

The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with gas-powered vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

Find out More

This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

 

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

P2P Transfers Solutions in the Zelle Network Earn Highest Scores for Customer Satisfaction

The Difference is Zelle

On the surface, it’s hard to parse the difference between most P2P transfer services. They all ultimately provide the same service with largely the same processing time. Zelle, however, no matter which specific bank is providing the end-user experience, tends to perform significantly higher in overall customer satisfaction than other brands. In fact, among the top eight performing brands in the study, seven are part of the Zelle network. They are (in alphabetical order): Bank of America, Capital One, Chase, PNC, Truist, U.S. Bank and Wells Fargo.

Interestingly, the three brands with the highest market share (PayPal, Cash App and Venmo) are all performing at or below the study average. That presents an opportunity for improvement in customer satisfaction for these platforms, and a chance for Zelle to expand its market share.

Users Love the One They’re With

Even though customers indicate there is room for improvement in the service they receive, 89% say they prefer the brand that they use most frequently for P2P transfers. Just 8% of P2P users say they “definitely will” or “probably will” switch the brand they use for sending money in the next year.

The most common reason customers are looking to switch brands for sending money is to be on the same platform as their friends/family (39%), followed by security concerns (28%) and poor customer service (19%).

Apple Pay Cash and Cash App customers have the highest intention to defect.  Conversely, less than 5% of Wells Fargo Zelle users indicate they are going to switch brands for sending money.[1]

The Opportunity Ahead

As P2P transfer services mature, users will start expecting more in terms of overall customer service. Whether that’s seamlessly integrating into a digital wallet, more convenience for paying at point of sale, or offering an increased level of security, platforms need to find a way to identify where their services can be strengthened, but also effectively communicate those improvements to users.

That’s evident in customers’ experiences with Zelle. Services in the Zelle network boast impressive customer service totals but lack the market share of other platforms. For Zelle to capitalize on the experience they’re providing, they’ll need to find a way forward that shows they understand how, when and why the user is transferring money on their platform so that they can convert on those high satisfaction scores into a broader user base. 

Find out More

This Banking and Payments Intelligence Report is based on responses from the JD Power 2024 U.S. P2P Transfers Satisfaction Study, which included 5,727 responses and was fielded in January-February 2024. It is authored by Sean Gelles, Senior Director, Payments Intelligence. Please contact us at the numbers below to connect with Mr. Gelles or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

[1] * Indicates small sample size for Fifth Third Zelle, Google Pay and USAA Zelle

Differentiation in Digital: How Asset Managers Can Stand Out Beyond Performance Metrics

Traditionally asset and fund manager marketing and sales messaging focuses strictly on financial performance. But there is a problem with that.

If everyone is talking about the same thing then why should your audience pay attention to you vs. all of your competition.

The Boston University Questrom School of Business recently hosted a conference where industry leaders gathered to discuss the evolving landscape of marketing and digital experience in the asset management space.

At the event, Craig Martin, Executive Managing Director of Wealth Intelligence at JD Power and Jim Cove Chief Marketing Officer of Natixis examined the importance of differentiation, trust, and firm credibility in the rapidly evolving digital environment.

A critical question for the market – how can asset managers effectively differentiate themselves through digital experiences?

Going Beyond Just Performance

Having a point of differentiation is critical to future success in the asset management space and digital is a vital channel to communicate and reinforce what is unique about the asset manager.

• While solid investment returns are vital, they are also expected. Beyond that, Advisors are seeking a partner who helps them improve their business.   
• Among financial advisors who rated their level of trust with an Asset Management partner as one of the highest among their partners, 80% said they were ‘very likely’ to invest with the firm in the future vs. just 15% for those who rated their level of trust average or below.
• Another key trait financial advisors are seeking in a partner is being ‘easy to do business with’. 79% of advisors who give asset management partners top marks on this brand perception said they were ‘very likely’ to invest with the firm in the future vs. just 19% for those who rated their level of trust average or below.

Effective digital strategies that balance all three elements –The Digital Experience Hierarchy.

The Digital Experience Hierarchy

The Digital Experience Hierarchy is a strategic framework measures the effectiveness of investors’  engagement with firms’ digital assets aligning it with investors’ satisfaction, retention, and overall business growth. This hierarchy consists of three levels: Foundational, Findable, and Valuable Elements.

Analysis of 2,500 site evaluations by Financial Advisors who used the asset manager site in the last month, JD Power has discovered that nearly half of experiences do not achieve the “foundational” aspects.

1. Foundational: provides content  and tools that increase product knowledge​ and has useful investment insights and education ​
2. Findable: Easy to navigate and ability to find important content​
3. Valuable: Aesthetically modern while reflecting the brand, is well organized, fast and responsive.

Trust: The Digital Frontier

A poor digital strategy can quickly erode trust, impacting perceptions both now and in the future. Trust isn’t built overnight. Consistent, transparent communication through digital channels can significantly enhance trust which is a critical factor in the decisions Advisors make when it comes to where to invest and who they partner with in the future.

A great digital experience is about understanding the ‘why’ of the end user and ensuring your digital experiences efficiently and effectively enable the end-user to achieve their goals for the site.  No matter how good your content, if it’s difficult to find and engage with then its value is minimized or totally lost. 

About the Author: Craig Martin, the Executive Managing Director of the Wealth and Lending Practice at JD Power, leads data analysis and thought leadership for Auto Finance, Consumer Lending, and Wealth Management industries, driving positive change and superior business outcomes. His insights, featured in numerous publications, address customer experience, satisfaction, and industry challenges.

VIDEO: June 2024 Financial Services Update

By embracing innovation and prioritizing personalized experiences, banks and credit card providers can redefine their role in enhancing financial well-being. We unpack the latest insights from the 2024 U.S. Retail Banking Advice Satisfaction Study in the June 2024 JD Power Financial Services Intelligence.

Here are some key insights that you can’t miss:

• Youthful Engagement: Younger consumers (<40) are actively seeking personalized financial advice. While they act on the advice received, satisfaction levels indicate room for improvement. Delivering robust tools and services alongside advice is crucial.
• Industry Standard Setters: Leaders like Citi, Bank of America, Chase, and American Express set benchmarks with proactive financial guidance, defining satisfaction norms.
• Frequency Optimization: Increasing interaction frequency across digital and traditional channels enhances satisfaction, engagement, and loyalty. A multichannel approach ensures comprehensive service accessibility.

Watch the full video for impactful insights on how improving customers’ financial health impacts loyalty and advocacy.

Bonus Content: Financial Health Personas

Understand the different groupings that Jennifer referenced in this edition of Financial Services Update. Your teams can begin to personalize financial services with strategic segmentation based on customer financial health personas. Access key demographics on the financially healthy, vulnerable, overextended, and stressed personas.

View Personas Details

Where can you find more insights like this?  

The JD Power U.S. Financial Health and Advice Program empowers banks and credit card providers to elevate customer financial wellness. By analyzing deep consumer insights and benchmarking performance, financial institutions can enhance their advisory services. Leveraging this data enables banks and credit card providers to optimize customer satisfaction, implement best practices, and refine strategies for superior financial outcomes. This proactive approach not only boosts service quality but also strengthens customer loyalty and market competitiveness.

Read the latest press release

More About These Experts 

Jennifer White is the Senior Director of Banking and Payments Intelligence at JD Power, is pivotal in shaping the financial industry’s understanding of consumer behavior. With over 20 years of market research experience, Jennifer leads prestigious studies, including the Retail Banking Satisfaction Studies and the Financial Health & Advice Program, driving critical insights that influence banking strategies across the U.S. and Canada. Her work on consumer financial health, digital banking trends, and fraud impacts is highly regarded and widely featured in top-tier publications like Forbes, The New York Times, and The Wall Street Journal. A respected thought leader and speaker, Jennifer’s expertise helps financial institutions enhance customer satisfaction, loyalty, and trust through innovative, data-driven strategies.

Miles Tullo is the managing director of the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients.  

Customers Lean Heavily on Mobile Budgeting and Spending Tools as Concern about High Prices Persists

Even as the national economic indicators seem to suggest a turning of the financial tide, the majority of bank customers in the United States remain worried that consumer prices will rise in the future.

According to JD Power, the percentage of U.S. bank customers who are financially healthy[1] dropped slightly, leaving 70% of customers in some state of financial duress. What’s more, the specter of higher consumer prices seems to be looming, leaving many to wonder about their next move.

Accordingly, customers are counting every dollar out the door, and it’s put an increased demand on the budgeting and spending tools banks offer on their mobile apps and websites.

A Trend Reversal

After months of gradual improvement, the number of customers who are financially healthy dipped slightly to 30% in May 2024, while 45% fall into the vulnerable category.

The number of bank customers who say the cost of goods is increasing faster than their income decreased to 72%, but 88% are at least somewhat worried prices for goods they use every day will increase in the next three months.

Finding the Balance

With concern about high prices stubbornly persistent, customers are keeping a closer eye on their spending. Seven in 10 (72%) say that it is extremely important that their primary bank always shows an up-to-date available balance. Somewhat shockingly, 6% say that their bank’s mobile app or online banking website does not display their available balance, while 6% say they don’t know.

What’s more, 60% of customers say that their primary bank instantly updates their available balance when they make a transaction. Another 21% say it updates within a few hours, 7% say by the end of the day, while 8% say it takes the next business day. Interestingly, online-only banks do the best job of delivering up-to-date balances in a timely manner.

Customers are also increasingly open to financial aggregator tools, particularly as many have shifted funds to pursue higher yield accounts or get a loan from another institution. Three-fourths (75%) say it is useful that their bank shows the balances of their external accounts, rates that were notably high in customers under the age of 40 (88%) and among those in the overextended category (87%).

Controlling the Controllables

It is clear customers feel that some degree of their financial situation is out of their own control. They’re watching costs closely and trying to find ways to mitigate the effects of high prices with the tools at their disposal.

For banks, this means that they need to find a way to empower their customers to handle these ebbs and flows with confidence by bolstering the tools that they are working with in real time. Gone are the days where checkbooks were balanced by hand. Customers rely on the snapshot they get on their primary bank’s mobile app to be updated and comprehensive. Institutions that can do this will see fewer overdrafts and better budgeting management from their customers, which should in turn help customers seize more control over their financial health.

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in May 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

Mass Market Distribution Strategies and Infrastructure Capacity to Define EV Adoption Trends in 2024 

E-Vision Intelligence Report
January 2024

Mass Market Distribution Strategies and Infrastructure Capacity to Define EV Adoption Trends in 2024

Key Findings

• Interest in EVs Surges as Vehicles Become More Affordable and More Widely Available: The proportion of consumers who say they are “very likely” to consider an electric vehicle (EV) for their next vehicle purchase or lease is now 29%, the highest rate in 16 months. The surge in interest is accompanied by significant improvements in affordability and availability, driven by a combination of Tesla price cuts and increased production of lower-price trims of Ford F-150 Lightning pickup.
• Honda Prologue Launch Underscores Distribution Strategy Challenges: The Honda Prologue, among the most hotly anticipated mid-size SUVs, will debut in 2024 with 5% of new-vehicle shoppers already indicating that they are “very likely” to consider it for their next purchase. Honda’s distribution strategy for the new vehicle will be an important indicator of the influence that Zero Emission Vehicle (ZEV) regulations, which have been adopted in 15 states, will have on new inventory rollout and pricing. The ZEV regulations require manufacturers to hit steadily increasing EV sales milestones to continue selling vehicles in that state. In many cases, however, the 15 states participating in the program are not Honda’s largest sales markets.
• Tesla’s Supercharger Network to be Put to the Test: As of November 2023, 23 automotive brands have committed to adopting Tesla’s North American Charging Standard (NACS), which will make 2024 a make-or-break year for the Tesla supercharger network. All told, 2.71 million EVs will soon be able to access Tesla’s 35,700 DC fast chargers, which is likely to exacerbate the strain on public charging infrastructure. Through Q3 2023, 17% of EV drivers indicated an inability to charge because a public charger was not available or was too crowded. That number is up from 9% in Q3 2021.

Executive Summary

Consumer interest in EVs is surging as attention turns to the new year, and the success of the next phase of EV adoption—when EVs move from early adopter novelty to mass market commodity—will largely be determined by the industry’s ability to navigate this complicated new marketplace.

This E-Vision Intelligence Report dives into key data points trending in each monthly EV Index update, along with other data points gathered from JD Power studies and pulse surveys, to spotlight emerging trends and important shifts in EV consumer sentiment.

Consumer Interest, Availability and Affordability at Peak Levels

There is no shortage of challenges confronting the auto industry right now. Uncertainty about the future of the economy, labor issues, lingering supply chain difficulties and a labyrinth of state and federal regulatory requirements mandating a transition to EVs are just a few of the top concerns. When it comes to the basic math of the EV transition, however, the industry is in a very strong position to seize the day.

According to the JD Power EV Index, consumer interest, availability and affordability are all hitting the highest levels we’ve seen this year. Nearly one-third (29%) of consumers now say they are “very likely” to consider an EV for their next vehicle—the highest rate in 16 months. Meanwhile, overall EV affordability has now reached parity with gas-powered vehicles, driven largely by state and federal tax incentives and significant price reductions in Tesla’s high-volume Model Y and Model 3.

Vehicle availability has also increased significantly, driven largely by new models coming to market and increased production of the Ford F-150 Lightning following a plant shutdown in June and July 2023. Lower-priced trims of the F-150 Lightning are now returning to dealer lots, helping overall price availability of the vehicle rebound 55 percentage points in this month’s report, boosting availability back to July 2023 levels.

ZEV Regulation to Weigh Heavily on Mass Market EV Distribution Strategy

One of the major challenges manufacturers will face as they start refining their 2024 EV distribution strategies will be navigating the ZEV regulation landscape. The rules, which build on California’s Zero-Emissions Vehicle Regulation, require manufacturers that sell more than 4,500 light- and medium-duty vehicles per year to hit certain sales thresholds for the sale of zero-emission vehicles and plug-in hybrid electric vehicles (PHEVs). By 2035, 100% of all new vehicle sales will need to be either ZEVs or PHEVs. To date, 15 states (California, Colorado, Connecticut, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont and Washington)—plus the District of Columbia—have adopted the rules.

Here’s where things get complicated for manufacturers strategizing vehicle launches. The current list of ZEV states does not necessarily match up with their largest sales markets. Additionally, consumer interest in EVs in some non-ZEV states is even higher than the levels of demand we see in some ZEV states. That leaves manufacturers weighing EV allocation plans, particularly as production capacity ramps up and inventory naturally builds.

For example, the Honda Prologue, which is currently the most anticipated EV SUV in terms of upper-funnel consideration, with a total of 5% of new-vehicle shoppers nationwide saying they are “very likely” to consider it for their next vehicle, is slated to launch in 2024. Honda has already indicated its plans to initially target ZEV states at launch. However, some non-ZEV states such as Florida—where Honda currently has 11% market share of all SUVs sold and where the brand has already sold 47,000 mainstream SUVs so far in 2023—pose interesting opportunities in terms of distribution strategy moving forward.

A Line Forms at the Neighborhood Supercharger

The other major challenge that will test the resolve of EV owners and manufacturers will be strain on the existing public charging infrastructure. Public charging has been a pain point since the first EVs came to market and the issue has only gotten worse as more consumers purchase EVs, with one notable exception: Tesla. According to JD Power data, Tesla earns significantly higher customer satisfaction scores than rival EV manufacturers when it comes to owners using public charging networks. Overall satisfaction with DC fast charging (Level 3) among Tesla vehicle owners is 736 (on a 1,000-point scale), while General Motors is 594 and Ford is 560. The average for all other manufacturers is 560.

This reputation for reliability and availability is going to be put to the test in 2024, as 23 automotive brands are added to Tesla’s NACS network. While Tesla has committed to ramping up production of new chargers quickly, the current calculus of charger supply and demand does not paint a pretty picture. Soon, some 2.71 million EVs will be able to access Tesla’s 35,700 DC fast chargers, which is likely to exacerbate the strain on the current public charging infrastructure. During Q3 2023, 17% of EV drivers who cited an inability to charge say it was because a public charger was not available or that station was too crowded. That number is up from 9% in Q3 2021.

 

Methodology

This JD Power E-Vision Intelligence Report is based on data and insights from the JD Power EV Index, the JD Power EV Retail Share Forecast, the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study and the JD Power U.S. Electric Vehicle Consideration (EVC) Study. The JD Power EV Index is an analytics tool to benchmark the growing EV market in the United States. It tracks millions of data points aggregated into six categories—interest, availability, adoption, affordability, infrastructure and experience—to evaluate the progress to parity of EVs with ICE vehicles in the U.S. Each month, the JD Power electric vehicle practice will analyze these data points, and others to spotlight emerging trends and important shifts in consumer sentiment that are helping to define the fast-moving EV marketplace.

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This report was authored by Elizabeth Krear, vice president, electric vehicle practice; Brent Gruber, executive director, electric vehicle practice; Stewart Stropp, executive director, electric vehicle practice; and Kristen Richter, senior manager, electric vehicle practice. The JD Power E-Vision initiative is a company-wide program focused on maximizing JD Power industry-leading EV data, analytics, insights and solutions. Please contact us at the numbers below to connect with the authors or to learn more about the underlying research.

Media Contacts

Shane Smith; East Coast; 424-903-3665; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

As New Technology is Integrated in Financial Services Industry, Most Bank Customers in United States Express Distrust for AI

Banking and Payments Intelligence Report
February 2024

Although the annual inflation rate is close to dipping below 3% for the first time since 2020, bank customers in the United States have yet to see major improvement in their financial situations.

According to JD Power, the percentage of U.S. bank customers that are financially healthy[1] remains near the all-time low, while new concerns are cropping up with the emergence of artificial intelligence (AI) in the financial services sector. And despite that many of these AI-driven tools could help customers, many are hesitant to trust the technology to help manage their money.

Financial Woes Continue

Customers’ financial health remains at a standstill. Nearly one-third (30%) of respondents are financially healthy, while 46% fall into the vulnerable category. These numbers are in line with the previous four months.

Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also remain virtually unchanged month-over-month. A small silver lining: The percentage of customers that are extremely worried that the prices for common goods will continue to rise dropped to 37% from 40% in January.

The More You Know: AI Edition

After exploding onto the scene in 2023, many industry analysts expect this to be the year when generative artificial intelligence will make a meaningful difference in consumers’ lives. Banking customers in the U.S. are skeptical. More than one-fourth (28%) believe AI (either generative or machine-learning/algorithmic) will make their lives better, while 17% think it will make their lives worse and 24% say they don’t know.

Familiarity with AI matters, as nearly half (48%) of customers that were very familiar with AI thought it would make their lives better vs. 6% of those who are not at all familiar with AI. To that point, customers of the nation’s largest banks and online-only banks are more familiar with AI than customers at credit unions or local banks.

The Hesitant Adopters

More proof of customers’ unease about AI is their willingness to let the adoption of this technology play out before they try. While many of these options are broadly available to customers, anywhere from 14% to 26% of customers (depending on the application) say they would not use AI for financial applications. Those include using facial recognition to withdraw money (26%), using tools that automatically change or update investment portfolios (21%), and using an AI bot to help find the best mortgage, auto loan or personal loan rates (18%).

Interestingly, customers are more willing to set aside their security worries or AI fears when the tools make an immediate impact on managing their financial lives. Notably, the percentage of customers that answered they would never use AI tools was the lowest (10%) when it would them avoid fraud.

When asked how much AI in financial services put them at greater risk for fraud or security breaches, 64% of all respondents said “somewhat.” One in five (20%) thought it put them at an extreme risk, while 16% said not at all. Key to financial institutions encouraging AI driven tool adoption will be reassuring customers about tool security.

Trusting the Machines

When it comes to AI, customers seem perfectly content to let someone else be the guinea pig. But, considering the current financial landscape, they might want to be early adopters of a tool that can move money from one fund to another if AI can read or anticipate trends that might keep more of their money safe.

It’s clear that if banks are going to get customers to buy in, they need to educate them about these tools. AI can be a gamechanger for underwriting loans, managing money, and streamlining time-consuming processes, but it will all be for naught if customers don’t trust it. The banks that can boost awareness and put their customers’ minds at ease on AI stand to make major gains.

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in January 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.

Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200; [email protected]

Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]