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A view of a branch of a TD Canada Trust bank in Toronto November 9, 2007.© Mark Blinch / Reuters

As people increasingly turn to computers and mobile devices to do their daily banking, has customer service among the big banks become a commodity?

Tim Hockey, group head of Canadian banking and wealth management at Toronto-Dominion Bank, doesn't believe so – especially after TD scooped up a coveted customer satisfaction award from J.D. Power on Thursday, placing first among the Big Five.

"The trend among banks is that the service levels have been going up," Mr. Hockey said, pointing out that the narrow business hours that defined banking years ago have evolved to longer branch hours and round-the-clock digital and telephone service.

"But I'd also say that consumer expectations of what constitutes good service is also going up."

Customer satisfaction, he says, involves far more than human interaction at bank branches. It now incorporates everything from an easy-to-navigate website to how a bank introduces new technology, and it can wobble with little more than a redesign.

The common element among these services: TD likes to incorporate what it calls the "biscuit" – a little extra that might have nothing to do with banking, but registers with customers as a nice touch. It started with free dog biscuits when you visited a branch, but has expanded well beyond canines.

A recent example: When a customer photographs a cheque as part of an online deposit, the TD app is quite forgiving of unsteady hands.

"It's that little extra, that gee-whiz factor," Mr. Hockey said. "It's the sum total of thousands of those things that is rooted in the culture."

It is also adding to the bank's collection of awards: TD has won the J.D. Power customer satisfaction award for 10 consecutive years, a winning streak that adds to the pressure of winning an 11th award as peers up their game.

Canadian Imperial Bank of Commerce, under new chief executive officer Victor Dodig, has been busily revamping its image to that of a more personalized bank after ranking last among the Big Five in J.D. Power's 2014 rankings. In the 2015 survey, CIBC moved ahead one spot.

"You have to keep raising the bar," Mr. Hockey said. "It was easier to win 10 years ago."

Back then, most bank customers interacted with their bank in the same way, making longer branch hours a sure way to win smiles.

Now, there is tremendous segmentation among demographic lines, with tech-savvy millennials taking a different approach to banking than, say, their grandparents. Banks have to serve both age groups, with a mix of traditional face-to-face banking and what Mr. Hockey calls bleeding-edge technology.

Despite their efforts to serve this wide range of consumers, the big banks are open targets among many, who often complain about rising service charges in particular. Indeed, the J.D. Power survey noted that overall bank satisfaction declined in 2015, from the previous year.

"When a retail bank increases fees and trims back on its core services to customers for the sake of increasing profits, they may be losing touch with one of the most important aspects of their business survival—the customer," said Jim Miller, senior director of the banking practice at J.D. Power, in a statement.

Mr. Hockey is aware of the fact that rising fees can provoke a hostile response from customers. However, he offers an explanation that draws on economic fundamentals and fairness.

"In a sustained low-interest environment, margins have been squeezed in the last few years," he said.

That is, the revenue traditionally generated from the spread between deposits and loans has fallen. Mr. Hockey said that this revenue, as a share of the bank's overall sales, has declined to about 50 per cent today from about 70 per cent a decade ago.

But fees, he adds, also reflect a service that is being provided, often drawing on complex technology.

"It's actually a good trend if you have fees that cover the marginal cost of a particular service," he said. "The consumer that is consuming that service pays for it."

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 18/03/24 4:00pm EDT.

SymbolName% changeLast
CM-N
Canadian Imperial Bank of Commerce
+0.73%49.6
CM-T
Canadian Imperial Bank of Commerce
+0.72%67.17
D-N
Dominion Energy Inc
+1.4%48.51
TD-N
Toronto Dominion Bank
-1.33%59.26
TD-T
Toronto-Dominion Bank
-1.4%80.23

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