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New FHA appraisal requirements effective April 1, 2009

National Mortgage Professional
Mar 29, 2009

J.D. Power and Associates reports: Achieving higher-than-average customer satisfaction can lead to two to five percent increase in deposit growth for banksMortgagePress.comJ.D. Power and Associates, Novantas LLC, banking branches, Rockwell Clancy Banking institutions that achieve above-average satisfaction levels among customers can potentially secure an increase of two to five percentage points in additional deposit growth, according to a report by J.D. Power and Associates and Novantas LLC. J.D. Power and Associates has collaborated with Novantas, a provider of management consultancy and information services to the financial services industries, to determine the impact of customer satisfaction on the financial performance of banking institutions. The research links customer satisfaction data from the J.D. Power and Associates 2008 Retail Banking Satisfaction Study,SM to the normalized deposit growth rates of branches where customers banked. The J.D. Power and Associates and Novantas research compares growth rates for customer banking branches within six individual metropolitan markets, including New York City, Chicago, Miami, St. Louis, Cincinnati and Minneapolis. "In this challenging economy, where executive focus is on the 'must-haves' of capital, credit and cost-cutting, the temptation is to place customer satisfaction on the back burner until conditions improve," said Rockwell Clancy, executive director of financial services at J.D. Power and Associates. "This is absolutely the incorrect thing for executives to do. Our work with Novantas indicates that among all of the factors that drive deposit growthincluding the number of branches in a bank's network, rates and fees and advertisingcustomer satisfaction accounts for 15 to 20 percent. Additionally, across all driving factors, satisfaction provides the most sustainable competitive advantage." The report finds that bank branches with more highly satisfied customers experienced faster annual growth (two to five percentage points higher, on average) compared with branches that had customers with lower satisfaction levels. This is particularly noteworthy as the market for deposit growth increased only 6 percent overall in 2008. "The difference between satisfaction index scores of 600 and 800 points[1] for a 500-branch network can be worth as much as $1.5 to $2 billion in additional annual deposit growth and $90 million in additional pretax profit," said David Kaytes, managing director of Novantas. "In today's difficult economic environment, few banks can afford to miss capturing this kind of value." J.D. Power and Associates and Novantas are currently initiating a second phase of the report, investigating the impact of customer behaviorsuch as attrition, loyalty and purchase of additional productson the growth and profitability of a bank. This phase, available in early April, will link specific drivers of customer satisfaction and commitment, such as convenience, interaction, and confidence, with specific customer behaviors. To view a whitepaper on the research findings, click here. For more information, visit www.jdpa.com or www.novantas.com.
Published
Mar 29, 2009
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