Americans to big banks: We forgive you
Despite paying record fines and charging high fees, financial institutions are no longer hated.
Despite the reams of bad press big banks have received for their sometimes questionable antics, a surprising number of Americans say they actually quite like their banks.
Customer satisfaction with banks is now at a six-year high, according to a study released Tuesday by the American Customer Satisfaction Index. The satisfaction rating rose 1.3% compared with last year, hitting 78 out of 100 (100 is the highest).
JPMorgan Chase (JPM) tops the list of big banks in terms of customer satisfaction, scoring 76 out of 100, a 3% climb from last year. Citigroup (C) scored a 74 (up 6% from last year), Wells Fargo (WFC) 72 (up 1% from last year) and Bank of America (BAC) a 69 (up 5% from last year; it is the only big bank that hasn’t yet gotten its customer service score up to pre-recession levels). In fact, overall customer satisfaction with banks is now higher than the average across industries.
What’s surprising about this climb in customer satisfaction is that it comes amid a flurry of bad press. Just this year, JPMorgan Chase made headlines when it agreed to pay a $13 billion fine (a record high) to settle allegations that it made misrepresentations over its mortgage backed securities that helped exacerbate the financial crisis -- and yet it retained the top spot among big banks on this list.
ACSI managing director David VanAmburg says that headlines like these don’t have much of an effect on consumers because they don’t impact their day-to-day banking experience in visible ways. Instead, he says, what’s primarily driving the uptick in customer service satisfaction at banks is their generally easy-to-use websites.
“More and more banks are creating good websites, and more consumers are using them,” says VanAmburg. And that, he says, is spilling over into the brick-and-mortar locales too, as fewer consumers have to wait in line and deal with customer service reps to do their basic banking.
At the same time, banks have been steadily raising their fees: Checking account fees hit a record high in 2013, according to a survey from Bankrate.com, with banks charging an average of $5.54 in monthly checking account fees and an average of $4.13 to make a withdrawal at an out-of-network ATM.
But that also doesn’t seem to be angering consumers too much: “There are ways to get around them,” says Greg McBride, senior financial analyst at Bankrate.com. Of the 473 checking accounts that Bankrate surveyed, 97% were either free or could become free if account holders met certain criteria, like signing up for direct deposit to get the monthly fee waived. Furthermore, though bank fees did tick up in 2013, these increases were slight compared with those in previous years, says McBride.
To be sure, credit unions and smaller banks still beat the behemoths in terms of customer satisfaction. Smaller banks score an 83 out of 100, up 5% from last year; credit unions score an 85 out of 100, up 3.7% this year. And despite big banks getting some love from their customers, those small bank and credit union scores should worry the big banks: Credit union membership hit a record high in 2011 and 2012 and is on track to exceed those numbers this year as well.
So what exactly do consumers like about banks? More than nine in 10 say that the staff at their bank is courteous and helpful, 88% say their financial transactions are completed quickly and 85% report that they are satisfied with the website experience.
On the flip side, consumers tend to be less satisfied with the competitiveness of the interest rates their bank offers (the average savings account now offers just 0.45% on average, according to Bankrate.com), the helpfulness of bank call centers and the number and location of their bank’s ATMs.
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Their customers might 'like' them. Don't confuse customer satisfaction with overall opinions of the banks. Most people hate them. Who got bigger & stronger with taxpayer help by starting this fiasco through their own greed?
In days of old (1970 + ), as a small business man you could apply to your local bank for a 30 day note. If the manager knew you, you could leave the branch with a small sum of cash to make your payroll or pay a supplier. Sometimes you could take the loan application home with you to be brought to the bank on the next business day. If you could not repay within the 30 days my bank transformed the note, for a $25 fee, to 5 year amortized loan with no prepayment penalty. They made it easy for start up mom & pop businesses to get a foothold.
As a senior, last year I needed $2300 for an auto repair. I had the money in a savings account I did not want to deplete so I asked for a simple passbook loan. That is where you USED to be able to borrow against your own account as security at a low rate. As you paid back the loan the bank USED to release the portion of the principal for your use. I took the money with that understanding for five years. When I got my first loan statement, which I had to ask for, I noticed that my savings available cash balance had not increased. Naturally I went to see the manager. It was explained to me that they withdrew the cash from my savings and secured the loan with a CD in their name. Had I known that I would have withdrawn the cash and paid my repair bill. Not only that but the banks USED to pay interest on the secured amount, even though it was not available. Not any more. I now have 2.5 years before the loan is paid or I pay a penalty for closing a CD.
I DO NOT LIKE BANKS !!! I guess I do not qualify as a happy bank customer !!!
I notice a tone of discontentment !!!
I am right there with you.
Ok, maybe hated is a strong word.
But I can guarantee you they are disliked.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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