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Community Banks Can Gain From Large Bank Customer Dissatisfaction: Survey

A recent poll of large bank customers found dissatisfaction with their primary bank, but a lack of willingness to switch.

Nearly half of customers of large national banks report not feeling loyal to their primary bank, according to the Consumer Banking Insights Poll. The poll of 1,000 bank customers was conducted online by Harris Poll in December on behalf of community banks that offer Kasasa, a turn-key, free checking account product from technology vendor BancVue.

The poll found that 46 percent of those surveyed who are customers at large, national banks do not feel "very loyal" to their primary bank. Further, 58 percent of respondents said they don’t believe their primary bank has their best interests at heart, and 42 percent feel their bank takes advantage of them with fees.

[Related: Community Banks, Credit Unions Pump Gas and Create Customers]

However, the poll found that dissatisfaction alone is usually not enough to sway customers of large banks to switch primary financial institutions. While 23 percent reported they’re at least "somewhat likely" to switch their checking account to a local community bank or credit union this year, 63 percent say they have never considered opening a checking account at a local community financial institution.

According to the poll, 24 percent of large bank customers say they don’t consider a community financial institution because they don’t believe they can offer the same benefits. Additionally, 83 percent of large bank customers say a recognizable brand name is at least somewhat important to them when choosing a bank.

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Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
3/11/2014 | 3:33:05 PM
re: Community Banks Can Gain From Large Bank Customer Dissatisfaction: Survey
Most people like to complain about their banks, but they rarely switch. I have absolutely no loyalty to my bank, but it's too much of a hassle to switch.
KBurger
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KBurger,
User Rank: Author
3/7/2014 | 7:16:38 PM
re: Community Banks Can Gain From Large Bank Customer Dissatisfaction: Survey
Also, it's possible that people who are philosophically dissatsifed with banks may be bypassing them altogether -- that is handling more of their financial services via non-traditional service providers (GreenDot, etc.). I'm sure that right now it's a very small percentage of the total banking customers, but undoubtedly it will be growing.
Byurcan
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Byurcan,
User Rank: Author
3/7/2014 | 12:55:08 AM
re: Community Banks Can Gain From Large Bank Customer Dissatisfaction: Survey
The post-"Bank transfer day" polls and surveys seemed to indicate that while a lot of people complained about their big bank, not many actually switched. In large part because it's just a hassle to switch banks in general. People have auto-bill pay, direct deposit etc set up with their existing bank and it's annoying to switch all that.
KBurger
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KBurger,
User Rank: Author
3/6/2014 | 7:53:51 PM
re: Community Banks Can Gain From Large Bank Customer Dissatisfaction: Survey
It would be interesting to see how much of this kind of activity (big bank customers switching to community banks or credit unions) has actually happened in the 5 1/2 years since the financial crisis, whether the rate of movement has been stable or has increased/decreased, and how it compares with the rate of movement pre-crisis. It's something that certainly was anticipated and advocated post-crisis, the cynic in me just wonders how much has actually happened. I suspect that people like to complain but at the end of the day it's too much effort to switch. Adding to my cynicism is that big banks are investing a lot in customer experience/engagement and I suspect that part of the branch transformation effort at many FIs will be to try to create a more intimate, "small bank-like" experience. Further, many community banks are not really small -- maybe, compared to JPMC, but they are big enought that "not everyone knows your name" (unless they've invested in technology that helps them do so).
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