A lot has been said about the Bank Transfer Day recently and its success (or lack thereof). In a recent interview by the Credit Union Times, I was asked how J.D. Power’s research supports or refutes the recent noise about customers moving their banking relationships from the large banks to credit unions and community banks. I would love to say that data shows customers are embracing Frank Capra’s rendition of the struggling but good-hearted Bedford Falls Building and Loan Association (“It’s a Wonderful Life”, for those who may not see the movie a dozen times over the next six weeks), but it’s simply too early to judge. The question at the heart of the matter is whether or not customers will suddenly decide to switch banks out of fee frustration and media encouragement? Obviously the big banks feel that at least their better customers will not while credit unions hope the opposite is true. While it is still too early for J.D. Power to define a point of view on the voice of the customer on this issue, there are some data points from the 2011 Retail Banking Study which may lead us to make some bets.
If we just look at customers who are largely dissatisfied (satisfaction under 600, based on J.D. Power’s 1,000 point scale) AND have had at least one problem or complaint in the last year, 55% of them STILL say they probably or definitely will NOT switch banks in the next 12 months! Whether it’s because of the hassle associated with switching or just because their bank still meets their needs, if these customers won’t switch, how likely will it be that a general satisfied customer will go out on a Saturday morning and move their accounts just because of a threatened $5 fee or online encouragement? If those dissatisfied customers in the Retail Banking Study are further segmented by income, there is still little support for the either argument as High, Moderate and Low income groups vary by only 4 percentage points on their inclination to NOT switch banks.
However, if problems are taken out of the equation and those dissatisfied customers are instead viewed by whether or not they have been charged a maintenance fee in the last year, inclination to switch does change. 30% of unhappy customers (overall satisfaction < 600) who have not been charged a monthly fee say they probably or definitely WILL switch banks in the next year. However, that number jumps 13 percentage points, to 43%, if a customer HAS been charged at least one monthly fee over the last year. That could argue in favor of the Bank Transfer Day resonating with customers who are already dissatisfied with their existing banks.
So what do you think? Did Bank Transfer Day make enough of an impact among customers and banks to make a difference? Was Bedford Falls’ Building and Loan able to get new customers because they told everyone to switch from the big bank? We will clearly know more in the weeks and months ahead.