CONSIDER THIS: According to J.D. Power and Associates' 2011 U.S. Retail Banking Satisfaction Survey, consumer satisfaction with bank fees has "decreased considerably from 2011." Yet surprisingly, their 2011 U.S. Retail Bank New Account Study reports that only "8.7 percent of customers in 2011 indicate they switched their primary banking institution during the past year to a new provider." This number represents only a 1 percent increase over 2010. Despite growing dissatisfaction with fees, a relatively small number of consumers have decided to abandon their current financial institution for a better deal. In a time when every penny counts for most households, why are consumers willing to keep paying higher fees rather than switch to another financial institution?
Many consumers are reluctant to move their accounts because they perceive the process to be too difficult. As a result, people tend to stick with the status quo even if they are not satisfied where they are. Among the factors that complicate changing financial institutions are:
- automated payments
- direct deposit
- setting up new bill pay information
- comparison shopping for a new financial institution
- cost of ordering new checks
Amidst changes to fee structures at many large banks, consumers have looked to smaller community banks and credit unions in increasing numbers. From June 2010 to June 2011, 44,000 new members have joined Georgia credit unions. However, investigating the differences in products and services offered and fees charged can be a time-consuming process.
You may want to know:
- How many consumers are dissatisfied with their current financial institutions?
- What factors contribute to their dissatisfaction?
- Do consumers believe it is costly or inconvenient to change financial institutions?
- What incentives motivate consumers to make a move?
- Is the process of changing financial institutions difficult for the consumer?
- If someone wants to make a change, what do they need to know?
- Why would consumers choose a credit union over a bank?
An insider’s perspective:
Glenn Miller, senior vice president of marketing and administrative services for Associated Credit Union in Atlanta, finds that people do believe it is difficult to make a switch. "Today we want everything to be quick and easy," he explains. "When consumers think of switching, they think of all of the automatic debits, their pay checks and starting bill-pay from scratch again."
Still, some consumers choose to look for greener pastures. "We see a lot of movement from the big financial institutions when fees are increased, or when new fees are placed on accounts which never had them," says Miller. Like many financial institutions, Associate Credit Union provides members with help through the process of switching financial institutions. "Currently, we have a Switch Kit, which explains how to switch, and we offer some letters that can be used to close old accounts and move debits. We are also working on a pilot project that would actually do all of the moving for you," says Miller.
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*Views and opinions expressed on these videos do not necessarily reflect those of Georgia Credit Union Affiliates.