Credit Unions Do It Right (Again)
U.S. credit unions continue to achieve much higher satisfaction and advocacy rates compared to large regional and national banks, according to results announced Tuesday of the 2012 ath Power Ideal Banking Study, which assesses the retail member/customer experience at credit unions and banks nationwide.
ath Power Consulting, a Boston-based financial services research and strategy firm, is a provider of member/customer experience solutions for the financial services industry.
Findings from the annual study indicate that 41% of members/customers surveyed are satisfied overall with their primary banking institution, a rise from last year's 37%. For the third consecutive year, USAA ranked highest in overall satisfaction.
The study revealed higher satisfaction levels in areas related to bank behavior and general quality of customer service. Although the biggest U.S. banks still trail smaller banks and credit unions in the customer service category, they increased in satisfaction in 2012. Among the top-four U.S. banks, Chase made the most significant year-over-year climb, with a 14-point increase.
"Over the past few years, financial institutions have been driven to become more customer-centric in an effort to retain current customers and attract new prospects--a response to a tougher regulatory environment and added competition from non-traditional sources," said Frank Aloi, ath Power CEO. "Our research indicates that these initiatives are beginning to pay off. Even so, there are still numerous areas that show need for improvement, including proactive communication with customers and problem resolution."
While customer experience factors differentiate highly satisfied and loyal customers, convenience factors are often the initial reason for choosing a financial institution, according to ath Power's ongoing research. Despite recent shifts by many banks to eliminate it, free checking--along with online banking and direct deposit--are universally desired as primary banking needs.
Similarly, mobile banking is rapidly moving toward essential product status with current adoption at 36%, up from 21% in 2011.
The study also examines the consumer likelihood to switch banks. In the past year, 10% of customers changed their primary banking institution. Top reasons for switching include new/raised fees, dissatisfaction with customer service, home relocation and account errors.
Customers of top-20 banks are three times more likely to switch to another financial institution than credit union members are. The greatest factors customers say provoke them to switch are loyalty/rewards programs, reduced fees on checking accounts and special offers to join, the study said.
Credit unions also scored high in other national and local surveys on trust, loyalty and member satisfaction studies this year. They include:
- Credit unions in the U.S.topped banks in member/customer satisfaction levels,in a recent nationwide survey released Dec. 11 by the American Customer Satisfaction Index (ACSI) (News Now Dec. 12). Credit unions remain best-in-class for financial services and set the bar for customer satisfaction among all service industries covered by the ACSI. Although member satisfaction dipped 5.7% to 82, the survey said, that score is still higher than the banks' average of 79.
- Trust in credit unions has remained high at 61% among Americans, according to the latest Chicago Booth/Kellogg School Financial Trust Index (News Now Nov. 6). The index also found that 23% of Americans say they trust the U.S. financial system. That is an increase of two percentage points since the last issue of the index in June and reflects a rebound of trust in the banking sector. The index has consistently reported notably more trust in credit unions than local and national banks, quarter over quarter, since it began in December 2008.
- Credit unions were rated No. 1 in a survey of 5,000 consumers asked to rate the reputation of 34 business sectors in a study conducted by Denver-based Prime Performance (News Now May 14). Credit unions topped all business sectors in reputation with an average reputation score of 5.78 on a seven-point scale with seven as "very good." They were followed by grocery stores (5.50), and community banks (5.40). Regional banks came in seventh at 5.04 and national banks 18th at 4.15.
- Credit unions topped the list of U.S. financial institutions in member/customer satisfaction, according to the 2011 Customer Experience with Call Center Representatives Survey by Prime Performance (News Now March 9). Members/customers said they were more satisfied last year in their interactions with credit union and bank call center representatives than in 2010. Based on a recent interaction with a call center representative, credit union members rated their overall satisfaction with a net score of 83%. The comparable score for small banks is 79%. The industry average is 70%. Falling below that are: large banks, 66%; Chase, 62%; Wells Fargo, 61%; and Bank of America, 56%.
- Credit unions were among the top customer satisfaction rankings in Temkin Group's release of its 2012 Temkin Customer Service Ratings, which examines how U.S. consumers rate the customer service of 174 large companies across 18 industries (News Now June 28).
- A National Cooperative Business Association (NCBA)/Consumer Federation of America (CFA) survey found more Americans think credit unions and other cooperative businesses have the best interests of their members and customers in mind more than do for-profit businesses (News Now May 3). The survey also revealed a favorable view of cooperatives in regards to their business trustworthiness and quality of service. Co-ops received higher marks across the board than for-profit businesses.
- Credit unions outshone banks in consumers' perceptions of safety and soundness, with 40% of respondents saying they believe credit unions are the safest financial institutions, compared with 34% naming banks (News Now Feb. 23). Nineteen percent of respondents said they trusted both types of institutions equally. The numbers are the results of the 2012 Credit Union National Association (CUNA) National Voter Survey.
- A CUNA survey in February found that 43% of respondents said credit unions were the best place for consumers to keep their day-to-day savings and checking accounts (News Now Feb. 22).