Customers are more satisfied than ever before with credit unions, according to a report released today by the American Customer Satisfaction Index (ACSI).
The credit union industry’s score soared 8.7 percent to 87 (on a scale of 0 to 100)–the highest score ever reached by any of ACSI’s 47 industries. In just one year, credit unions have tripled their ACSI lead over banks.
"Banks are facing difficult times on multiple fronts: Profits are being squeezed, regulators are more demanding, foreclosures remain problematic, and consumers are fighting back on fees. On top of all this, many banks are losing customers, including defections prompted by grassroots efforts like the recent Bank Transfer Day," said Claes Fornell, ACSI founder and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "While it is too early to quantify just how much business the big banks have lost to smaller competitors, the new ACSI data suggest credit unions and smaller banks now have become an even more attractive alternative for consumers."
Customer satisfaction with banks – which includes personal banking services like checking, savings and personal loans – retreated 1.3 percent to 75. This small downturn comes from a 1 percent slip in satisfaction with the aggregation of smaller banks (which make up a large portion of the industry’s market share). At 79, however, the smaller banks stay well ahead of the four largest banks, despite considerable improvement by two: Citigroup and JPMorgan Chase.
Among the four big banks, last year’s leader Wells Fargo keeps its customer satisfaction stable, but a 6 percent improvement for Citigroup places the two in a tie for first at 73. Citigroup’s ACSI score reflects customer satisfaction with services of its Citibank division. In the aftermath of the subprime mortgage crisis, Citibank is shrinking as it closes branches and serves fewer customers. The customers who have chosen to stay are more satisfied.
The second gainer among four banks, JPMorgan Chase, improves 4 percent to 70 and maneuvers past a stagnant Bank of America at 68. Chase’s rebound this year follows a string of ACSI losses, but the bank has yet to return to its pre-financial crisis customer satisfaction level. Still, Chase is now the largest U.S. bank in terms of assets, supplanting a beleaguered BoA. Stranded in last place for customer satisfaction, BoA faces unresolved revenue challenges after scrapping a wildly unpopular plan to impose new debit card fees. For any of the large banks, the gap between their own ACSI score and the scores of either small banks (79) or credit unions (87) is daunting.
"Because of their size, both small banks and credit unions benefit from an ability to provide more personalized service," said Fornell. "The challenge for these smaller institutions will be how best to maintain high levels of customer service with minimal or no fees amid a major influx of new customers."
