Consumers rate small banks higher than big ones
Bank of America least popular of the big banks
Sunday, December 16, 2012
With the exception of JPMorgan Chase, big banks continue to fall out of favor with consumers. A report by the American Customer Satisfaction Index (ACSI) finds customers satisfaction with banks rose 2.7 percent this year, due almost entirely to satisfaction with small community banks.
Small banks -- stable at an ACSI score of 79 -- continue to outclass large banks and capture market share because of it.
“As more customers move from large banks to smaller banks and credit unions, the overall customer satisfaction level for banks goes up as a matter of mathematics,” said Claes Fornell, ACSI founder. “As the smaller banks do a better job with customers and therefore attract more of them, customer satisfaction for banks on the whole gets a boost.”
JPMorgan Chase leads among big banks. Its ACSI score rose six percent to 74, matching its pre-recession result from 2007. But other big banks have to deal with deteriorating customer satisfaction.
Wells Fargo, for example, fell three percent to 71 and Citigroup retreats four percent to 70. Bank of America was the biggest loser, falling three percent to 66, reaching its lowest level of customer satisfaction in over a decade. Fees may be a big reason for that.
“The total fees from overdraft charges alone in 2011 -- most of them from big banks -- amounted to more than $30 billion,” Fornell said. “Customers increasingly are rejecting the ever-mounting fees charged by large banks and taking their business to credit unions instead.”
But customer service still rankles a few consumers, as evidenced by Nina, of Roseville, Calif., in her complaint to ConsumerAffairs.
"I hate Bank of America, not least because of its completely incompetent customer service," Nina wrote in a recent post. "I always introduce the problem before launching into an explanation. But the person on the other end of the line has, without fail, waited until I finished before informing me they can't help me."
Fornell says Bank of America, in particular, stands out as the only bank that is still below its pre-recession customer satisfaction level. He believes it is mostly because of fees.
Challenge for credit unions
Even though ACSI still rates credit unions at the top of the heap in financial services, Fornell says these institutions have been victims of their own rapid growth in the last year. As more consumers moved their accounts, customer service reps at credit unions have struggled to keep up.
“The large influx of new customers for credit unions, many of whom left banks because of rising fees, poses new challenges for customer service,” Fornell said. “The question becomes, how to best serve a fast-growing customer franchise? The more customers you have, the more difficult it gets.”
When it comes to insurance, ACSI found policyholders are less pleased with property and casualty insurance as higher-than-average rate increases took a toll on customer satisfaction.
Overall, the property and casualty insurance industry tumbled six percent to an ACSI score of 78. Much of the weakness, it found, is opposite the banking industry. Consumers appear less satisfied with smaller insurance companies.
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