In the last two years, more than ever before, consumers have been evaluating their primary banking relationships and thinking about making a change. The reasons are legion ranging from concerns about the recession and 10% plus unemployment as well as the turmoil in the banking industry leading to a government bailout of the largest institutions. These stirrings have given rise to media-driven initiatives for consumers to leave the “too big to fail,” fee gouging national banks in favor of more customer-oriented community banks and credit unions. The recently published report from J.D. Power & Associates 2011 US Retail Bank New Account Study presents some perspective on what has really happened in consumer’s minds and what is driving consumers to change institutions.
The study, which examines the bank shopping and selection process, as well as customer satisfaction with the account initiation and on-boarding processes, finds that 8.7% of customers in 2011 indicate they switched their primary banking institution during the past year to a new provider, whereas just 7.7% said the same in 2010. On average, customers in 2011 say they considered 1.9 banks while shopping — up from an average of 1.6 banks in 2010.
According to Rockwell Clancy, vice president of the financial services practice, the most common reason for switching banks is a change in life circumstances, although customers also switch because of fees and rates, unmet expectations and poor service. For customers evaluating and ultimately selecting a new bank, the most important factors driving their decision are advertising; branch convenience; products and services; promotional offers; and direct and indirect customer experience (including past personal interactions, recommendations and bank reputation.) However, pricing—fees and interest rates—carries relatively little weight in influencing customer purchase decisions, despite recent heavy media coverage of changes to fees for bank accounts and credit cards.
A related story in thefinancialbrand.com: http://thefinancialbrand.com/17355/jd-powers-research-new-bank-account-customers/ provides a graphic from the study “Consumers Path to Purchase” that breaks the sales funnel into three phases and identifies the top drivers at each stage.
For more information read J.D. Powers press release: http://businesscenter.jdpower.com/news/pressrelease.aspx?ID=2011020
