By: Nancy Steadman
The country's largest financial institutions carry significant membership numbers, offer a variety of complex retail and commercial banking products and maintain sizable assets and investments. However, customer satisfaction research shows that bigger is not always better and does not equate to higher levels of consumer sentiment and trust. In fact, it appears that the trend of gravitating toward smaller, more personalized institutions is what most Main Street Americans are seeking out in a financial services provider.
A new report released by the American Customer Satisfaction Index shows that credit unions remain a top choice over large banks and set the benchmark for customer satisfaction in several financial services categories.
"The large influx of new customers for credit unions, many of whom left banks because of rising fees, poses new challenges for customer service," said Claes Fornell, ACSI founder and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "The question becomes, 'How to best serve a fast-growing customer franchise?' The more customers you have, the more difficult it gets."
Small banks, credit unions surpass big banks in several categories
The research reveals that when it comes to checking, savings and loan accounts, overall customer satisfaction with banks grew by 2.7 percent, primarily as a result of Americans' growing preference of smaller banks. The study's authors note that due to growing satisfaction among these community institutions, credit unions and community banks have been able to gain a larger market share, a trend that is likely to continue in the future.
Although JPMorgan Chase experienced a 6 percent uptick in customer satisfaction - bringing it back to pre-2007 levels - other large banks saw a decline in sentiment. Positive consumer sentiment at Wells Fargo fell 3 percent, and Citigroup experienced a 4 percent decline. Bank of America also saw its customer satisfaction slide 3 percent, bringing it the lowest level in roughly 10 years.
Analysts say rising fees are a large contributor to dissatisfaction at larger institutions. While their fee structures have risen in recent years, data shows that community banks and credit unions have kept their service fees reasonable and consistent. In addition, they have continued to offer highly demanded products, such as debit card rewards checking that many large banks have abandoned.