By: Joe Gillen
By now, most banks and credit unions are fully informed that customers are largely adverse to excessive fees and charges. While most community bank and credit union programs have maintained existing fee structures, a number of national banks have relied more heavily on fee income to maintain profit.
For example, a recent survey from MoneyRates.com found that current fees for maintaining accounts or covering overdrafts are continuing to climb considerably to new levels.
"This time around, the average monthly service fee, overdraft fee, and ATM charge for non-customers all hit the highest levels we've seen," MoneyRates spokesman Richard Barrington told Time Magazine. "Big banks are leading the trend towards higher monthly service fees – not only are their average fees higher, but the percentage of free checking accounts at big banks is roughly half what it is at medium and small banks."
Although these scenarios have led to a mass exodus of customers, some banks are imposing new discretionary charges that consumers can pay to gain access to additional services or benefits, namely customer service. For example, a handful of banks now allow customers who want to cut the line to speak to a customer service representative the opportunity to do so if they agree to pay a fee. These institutions may be trying to capitalize on customer satisfaction research which shows that consumers who gain access to quick, helpful customer service are more content and loyal than those with poor experiences. However, analysts have not yet commented on how this new fee option has impacted customer service.
Banks seek out new charges, rather than hiking existing fees
Despite the knowledge that modest fee increases can prompt customers to switch institutions, many banks are simply getting more creative with their charges. For example, rather than increasing existing rates for services, many are adding additional fees for other services, but trying to keep them modest, the news source reports. Union Bank, for instance, will soon begin levying a $1.50 fee for online bill pay in the future. Other banks are waiving penalty charges for customers who use out-of-network ATMs if they agree to a flat fee of less than $5.
Although many consumers have opposed these fee hikes by switching to other banks, a large number have remained with their current institutions because they argue that switching banks is too difficult. For this reason, community banks and credit unions may consider offering assistance programs that help facilitate bank transfers. A number of local institutions already offer this guidance, which has greatly helped boost their acquisition numbers.