Bank customers are more likely to switch

A survey result from J.D. Power & Associates doesn’t surprise: Customer loyalty to big banks has declined and more people are willing to switch. Maybe the Move Your Money campaign is catching on.

Only 34% of customers said they “definitely will not” switch banks, compared with 46% three years ago. However, among small-bank customers, 41% said they wouldn’t switch, compared with 32% of those who use big banks. J.D. Power says: “Higher customer satisfaction with in-person service and attention is an important contributor to increased loyalty at smaller banks.”

Other findings from the report:

• Of people who’ve switched banks, 37% cited poor customer service and 29% cited high fees. “Performing simple service acts, such as greeting customers as they enter the branch, offering additional assistance and thanking them for their business, can increase overall satisfaction by nearly 50 index points, yet less than 60% of customers report experiencing them,” J.D. Power says.
• Meanwhile, more customers are banking from home: 51% said they prefer online banking, up from 45% in 2008.
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The report also broke out results in 11 different regions or states. A few examples:

• In the Northwest, Sterling Savings Bank, Wells Fargo and Keybank all received high marks; Bank of America and Chase, not so much.
• In the Mid Atlantic, Northwest Savings Bank and Susquehanna Bank were among those that got high scores. Citibank did even worse than Bank of America.
• In Texas, Frost National Bank got top marks. Citibank and Compass Bank were least impressive.

The new survey found that “overall satisfaction of retail banking customers averages 748 on 1,000-point scale in 2010, a slight decrease from 749 in 2009. Brand image of banks also declined, with customers perceiving banks as being more profit-driven than customer-driven compared to 2009.” Imagine that.

• Bing: Bank horror stories

How can banks improve in customers’ eyes? Providing better service, more choices, and fewer surprises like new fees, the report says.

Are they listening? Perhaps. For instance, the Los Angeles Times said:

Bank of America declined to comment on the survey, but said in a statement that it was giving less weight to product sales numbers these days in evaluating employees and instead shifting to "a customer relationship-centric approach where we will grow the business by meeting customer needs."

Have you considered switching banks or have you done so? Have you found happiness at a smaller bank or credit union?

Related reading:

• Should you ditch your bank?
• Are you fed up with your bank? 3 tips for simple switching
• Site helps you find a better bank
• Is it time to say no to the big banks?