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CU System
J.D. Power Banks brand image dropping
WESTLAKE VILLAGE, Calif. (4/26/10)--For the fourth straight year, customer loyalty and perceptions of brand image among retail banking customers continues to decline while satisfaction has leveled off, according to J.D. Power and Associates’ 2010 U.S. Retail Banking Satisfaction Study. Overall satisfaction of retail banking customers averages 748 on a 1,000-point scale--a decrease from 749 last year. The brand image of banks also has continued to decline, with customers perceiving banks as more profit-driven than customer-driven, compared with 2009, the study said. The percentage of customers who said they “definitely will not” switch banks during the next year also decreased to 34%, compared with 46% in 2007. Poor customer service--the most common reason given for switching banks--was cited by 37% of customers who changed their primary bank in 2010. Greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points, yet less than 60% of customers reported experiencing those amenities. “As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of banking at J.D. Power and Associates. “Banks that get back to the basics--such as maintaining a clean branch and greeting customers upon entering--may help to alleviate some of the distress customers are experiencing and increase their overall satisfaction.” About 29% of customers who switched banks in 2010 cited high fees for products or services as their reason for switching. Use of remote banking options is becoming increasingly common, with 51% of customers in 2010 indicating a preference for online banking, up from 45% in 2008. Also, 7% of customers reported using a mobile device for checking balances, transferring funds and paying bills. Surveys by Forrester, the Chicago Booth/Kellogg School Financial Trust Index (News Now Feb. 5), and the Rasmussen Index, have all showed credit unions to be more trustworthy than banks. Forrester Research’s annual Customer Advocacy rankings placed credit unions well ahead of banks after about 70% of credit union members surveyed told Forrester that their financial institution puts their interests first. Credit unions were ranked higher than banks because they have a different operating model--they are owned by their members--and they emphasize customer service, said Bill Doyle, Forrester vice president (News Now via The New York Times Feb. 5).
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