By: Joe Gillen
Each year, new customer satisfaction studies emerge showing that consumers are steadily losing faith in Wall Street institutions, while confidence in local banks and credit unions continues to increase. Most banks that relied more heavily on fee income to generate revenue after Dodd-Frank reforms were put in place quickly realized that doing so was leading to lower levels of customer sentiment, and prompting a larger-than-expected percentage of customers to close accounts and switch to smaller banks. In response, many large banks are now trying to makeover their public images in an effort to better compete with local institutions.
For example, Fidelity Bank recently made a "Customer Satisfaction Pledge" to customers, and implemented a series of steps to improve service quality. Group Managing Director and CEO of Fidelity Bank, Reginald Ihejiahi, announced that it would further develop new products to appeal to its clients needs, according to This Day Live. The bank recently launched a "Cars and Cash Savings Splash" promotion to celebrate its 25 year anniversary. The promotion allows customers to earn prizes, cash rewards and other benefits for participating.
"We will continue to make our customers happy especially as our business continues to grow with more and more people signing on to the Fidelity Bank account," Ihejiahi told the news source. "All that we are after is to make our customers happy by offering them delightful services and to help their businesses grow."
Community banks, credit unions should be prepared to compete with large institutions
Offering value programs is an extremely effective way to attract new customers and retain existing ones. Credit unions and community banks can remain competitive with larger institutions by first highlighting existing programs that differentiate them from Wall Street banks. This includes rewards checking, free checking programs and low-rate loans. Many institutions are also in development of financial literacy programs, reward programs and mobile initiatives to facilitate consumer education and offer valued products.
Community banks and credit unions can also compete with banks by implementing new programs that appeal to customers and members, such as reward-based or loyalty programs that provide valuable returns. Many analysts note that in order for smaller institutions with fewer resources than large banks to stay competitive, it's important for them to be creative and think out-of-the-box. By implementing new programs, maintaining high levels of personalized service and continuing to offer existing valued accounts, local institutions may continue to compete with large banks.