National Banks Improve the Customer Experience

Across the bank industry—from large national banks to small regional and community institutions—the customer satisfaction momentum in 2016 is positive. Banks overall surge 5.3% to a score of 80 on the ACSI’s 100-point scale. This rising trend is one of the more surprising results from the ACSI’s report on the Finance and Insurance sector as it holds true across nearly every big bank.

Smaller size, however, continues to distinguish the top tier as community banks and credit unions remaining pacesetters. In general, more personalized service and the ability to offer lower fees make for happier customers. Nevertheless, both super regional banks and national banks post substantial gains, with the latter moving up 6.9% to 77.

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ACSI data show that big banks are making progress toward improving the customer experience. From the variety of financial services available to call center operations, national banks earn better ratings compared with a year ago. The critical website user experience is deemed more satisfying (up 2% to an ACSI benchmark of 85), but community bank websites set the pace at 88. When it comes to face-to-face contact, small banks earn the top mark for courtesy and helpfulness (91)—a level of excellence that staff at big banks have yet to attain (86).

Among the largest U.S. commercial banks, Citibank heads the field in 2016 with a 12% leap to 82, a score that rivals the satisfaction level of credit unions and nearly matches smaller community banks.

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Wells Fargo slips out of first place for customer satisfaction not by suffering an ACSI decline, but by showing less improvement than its competitors. Adding just 1% to an ACSI score of 76, Wells Fargo is now below average. Closing in on Wells Fargo, Bank of America (+10%) and Chase (+6%) are tied at 75.

Stock performance for big banks mimics their ACSI changes. Since February, Chase, Citibank, and Bank of America have each shown solid gains, whereas Wells Fargo’s stock lagged its national competitors even before news of improper sales practices broke.

ACSI Finance and Insurance Report 2016 »

Media Post:  Citibank Leads National Banks In Study »

Consumers Appreciate Personal Touch of Community Banks

Regional and community banks offer a level of service that competes with the membership model of credit unions, according to recent results from the American Customer Satisfaction Index. Credit unions have a history of being a satisfaction pacesetter, scoring at or near the top among 43 ACSI industries. In 2015, the industry may be experiencing growing pains from burgeoning membership as its ACSI score drops 4.7%.

Nevertheless, credit unions continue to receive some of the best customer experience benchmarks in the ACSI. At the same time, regional and community banks show that they are no slouches when it comes to well-regarded customer service. Across an array of customer experience elements, community banks earn scores that approach—or even exceed—credit union ratings.

The high point for both credit unions and community banks is courtesy and helpfulness of staff, scoring 90 and 89, respectively, on a scale of 0 to 100. Transaction speed for both is swift (89 and 87) and interest rates are competitive (80 and 78), especially when compared with national banks (69). In fact, nearly every aspect of the customer experience offered by community banks and credit unions is deemed excellent, including service variety, account changes and information, and touchpoints like call centers and websites.

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The two areas where community banks and credit unions fall behind nationals and super regionals are number and location of branches and ATMs. While this is not surprising given the local focus of smaller institutions, clearly their customer base is craving a bigger footprint for services. The personal touch, however, is winning out over location convenience—as demonstrated by the much lower overall customer satisfaction of national banks (72) versus community banks (80) and credit unions (81).

A recent BloombergBusiness article on the popularity of local over “big banks” with millennials discusses how fewer fees and a more “high-touch” approach is driving young bank customers away from national institutions and toward community banking. Even as many banking transactions move online, young customers also look for a one-on-one approach and are more likely to seek financial advice. ACSI data demonstrate that for millennials and non-millennials alike, banks and credit unions will gain favor with customers by focusing less on collecting fees and more on delivering excellence in their customer relationships over the long haul.

BankNews: Credit Unions Losing Edge Over Community Banks on Customer Satisfaction Index »

ACSI: Finance and Insurance Customer Satisfaction Slides as Cost Cutting, Fees and Premiums Pinch Customers »

Consumers Say Credit Unions Offer Better Rates Than Banks

For a second year, credit union members feel that they receive better service and more competitive interest rates than consumers who have accounts or personal loans through retail banks. ACSI’s annual study on financial services shows banks down 2.6% for customer satisfaction to score 76 on a 100-point scale. Meanwhile, credit unions—with membership now surpassing 100 million—are second best among all ACSI industries with a high benchmark of 85.

ACSI’s findings coincide with record-high fees for checking accounts, but banks are actually collecting fewer fees than ever before. Consumers are becoming more adept at avoiding extra charges, but another strategy may be avoiding the big banks altogether. While the structure of credit unions allows for fewer fees, CUs still provide superior service in nearly every area, from transaction speed to Web banking.

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Indeed, consumers looking for free checking are much more likely to find it at a credit union. For interest rate competitiveness, customers put CUs ahead of banks by a wide margin of 13 points. The only areas where banks outpace credit unions are number and location of ATMs and branches. While this is not surprising given the more localized nature of credit unions, this may be an area that the industry could focus on improving, especially as membership continues to swell.

The Washington Post: Why Customers Are Less and Less Happy With Their Banks »

Denver Business Journal: Rising Fees Hurt Banks’ Image, but Consumers Happy With Credit Unions »

Albuquerque Business First: Study Finds Credit Unions First in Customer Satisfaction »

Credit Union Journal: CUs Still Enjoy High Customer Satisfaction: But Have Levels Peaked? »

Credit Union Members Happier, But Crave More ATMs

Do you plan ahead when you need to hit the ATM? If so, you may not be alone. The latest report on customer satisfaction with credit unions and banks shows that overall, customers are happier in 2013 with the quality of service for their checking and savings accounts or loans. The bank industry returns to a pre-recession high of 78 (scale of 0-100), while credit unions climb 3.7% to 85—sharing this year’s top slot for customer satisfaction with televisions and video players.

Although bank fees have been rising for 15 straight years, customer satisfaction has not suffered this year. Consumers, however, may be savvier when it comes to avoiding these costs by relying on their own banks’ ATMs or keeping ahead of minimum balance requirements. Credit unions are starting to add more fees, but their superior service shines in comparison to banks across a multitude of customer experience benchmarks, except—you guessed it—ATMs. The number and location of branches are also big drawbacks for members, but like smaller banks, credit unions are unlikely to compete with megabanks when it comes to offering bricks-and-mortar.

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Banks and credit unions both receive high marks for customer service at branches and for online banking—but the edge stays with credit unions. Credit unions far outperform banks when it comes to competitiveness of interest rates, and their more personal touch is apparent in their higher score for call center satisfaction. Aside from branches, the chink in the armor for credit unions remains their more limited ATM offerings. If this drawback is addressed, it would likely push the industry’s already top-notch member satisfaction even higher.