What causes consumers to change banks or credit unions? Customer dissatisfaction comes in many shapes and sizes, but a recent survey of 2,000 consumers by MoneyRates.com reported by The Financial Brand reveals that despite complaints about fees, bank closures, and bad customer service (the top three complaints), customers don’t change financial institutions.
Among the complaints made by consumers, fees topped the list. A credit union survey found that 60 percent of consumers said they would leave their current bank of credit union if they didn’t get free checking. However, 31 percent of consumers said they were pleased with the fees they were paying. Only 39 percent of banks currently offered free checking in 2012, down from 45 percent in 2011, and the number of checking accounts with no maintenance fees dropped 5 percent.
Bad customer experience ranked number two as the biggest consumer complaint. Only 2 percent of those surveyed found customer service to be the best thing about their checking account provider. The MoneyRates.com survey said one in five consumers said they would switch over bad service, but only one in 10 actually do.
Consumers still want the convenience of branch banking. If those surveyed, 40 percent said branch convenience was one of their top two priorities. However, branches process only half the number of transactions they did 20 years ago; specifically a decline of 45.3 percent since 1992 according to one study.
So if consumers aren’t going to the branches, they must be doing more banking online. The survey showed that 83 percent ranked their provider’s online banking as “excellent” or “very good,” and 46 percent said that easy online banking ranked number one or two as their most important criteria when looking to open a checking account.
The truth is that most consumers would rather gripe than switch. Research from Deloitte says that 74 percent of customers are “satisfied” or “very satisfied” with their primary bank. However, these same consumers are willing to take a survey to tell you what they don’t like about banking services. Only 12 percent of consumers have actually changed banks in the last two years, and of those, one in 10 switched because of relocation, and 39 percent cited fees as the main reason to change; that’s only 4.7 percent of consumers.
What this survey does tell us, however, is even if consumers aren’t ready to change financial institutions, considerations like fees and customer service are top of mind with customers. When they do relocate, or decide that excessive fees, bad customer service, or some other factor forces them to make a change, bank fees will be top of mind when they do choose a new bank. To remain competitive, banks and credit unions need to rethink their fee strategy so they can use value-added services, like mobile deposit and online banking to bring in new customers. Our research shows that the right combination of value-added services not only increases revenue but improves customer loyalty as well.