More than one in four people currently use only online or mobile channels to do their banking, but that “digital-only” crowd is also the least satisfied group of banking consumers, according to a new J.D. Power study.

The data and analytics company's survey of more than 88,000 customers of 200 of the largest banks in 11 regions of the United States reported that 28% of respondents are now digital-only bank customers. The survey, conducted from April 2017 to February 2018, also found that those customers were less satisfied than every other customer group, including customers who exclusively used branches, as well as “digital-centric” customers, who used online or mobile banking but had used a branch once in the past three months.

Branch-dependent digital customers — people who use branches two or more times in the past three months and used online or mobile banking — were the most satisfied, according to the survey.

“There is no doubt that digital banking channels give banks an enormous opportunity to reduce costs, but the risk is that those cost savings come with lower levels of customer engagement,” J.D. Power Banking Practice Senior Director Paul McAdam said. “Right now, retail banks need to address the growing digital divide that is emerging within customer segments. Successfully navigating that transition will require banks to provide better, more personalized advice that is consistent across both digital and branch interactions and to ensure that customer needs are met, regardless of channel.”

The survey measured customer satisfaction in six areas: channel activities, communication and advice, convenience, new account opening, problem resolution, and products and fees. Channel activities included online assistance, ATMs, branch service, call center service, automated phone service, mobile banking and online banking.

For digital-only customers, the biggest complaints largely had to do with weak communication and advice, issues with products and fees, and issues around new account opening, the study said.

J.D. Power's study also highlighted some demographic differences in the satisfaction scores.

“The gap in satisfaction between digital-centric and branch-dependent customers cuts across all generations of retail bank customers, but it is most pronounced among millennials (35-point satisfaction gap) and Gen X (24-point satisfaction gap), bucking the conventional wisdom that younger banking customers do not like to use branches,” it reported.

The survey also found that big financial institutions had the largest concentration of digital-centric customers (47%).

“While the retail banking industry has a great deal of work to do to bridge the growing digital divide, some leaders have already begun to make huge progress on the digital learning curve,” McAdam said. “Some of the best practices being pioneered today by digital leaders include highly personalized digital interactions along with branch transformation efforts that serve the needs of both digital-centric and branch-dependent customers.”

The banks with the highest customer satisfaction scores by region were:

• California Region: U.S. Bank
• Florida Region: TD Bank
• Mid-Atlantic Region: Northwest Bank
• Midwest Region: First National Bank of Omaha
• New England Region: Bangor Savings Bank
• North Central Region: City National Bank (W.V.)
• Northwest Region: Banner Bank
• South Central Region: Trustmark National Bank
• Southeast Region: United Community Bank
• Southwest Region: MidFirst Bank
• Texas Region: Frost Bank