As CUs continue to dominate annual consumer satisfaction survey, compelling findings come with bill payment

NEW YORK – Once again credit unions find themselves beating banks in a prominent annual consumer satisfaction survey. The news this year is how bad CUs are beating everyone in the online world. Credit unions and banks alike await the American Banker-Gallup Consumer Survey each year to see if they’re gaining or losing ground on each other and what their primary customers/members think of them. Since 1989 credit unions have consistently beat banks and thrifts in satisfaction ratings. This year was no different. Seventy-six percent of members who consider their CU their primary financial institution (PFI) said they are very satisfied with their CU. That’s only up 1% from last year, but way ahead of bank and thrift satisfaction levels. Only 61% of primary bank customers reported being very satisfied. That was a 3% improvement over last year. As for thrifts, satisfaction plummeted. Just 58% of primary thrift customers were very satisfied, down from 68% last year. If you take all these numbers together it adds up to 63% of Americans being very satisfied with their PFI, the exact same percentage as last year. “You have to like the descriptive phases the Banker reporters use in describing credit unions,” said John Zimmerman, public relations manager for NAFCU. “Last year credit unions received `the loudest applause’ from members and this year credit unions received `more plaudits’ while in another reference this year they `clobbered’ both banks and thrifts in customer satisfaction. However the word most often used is `again.’ Again credit unions by a large margin score top marks over banks and thrifts in customer satisfaction.” Banks and thrifts did pick up some ground on CUs in one key category – service. While credit unions beat everyone with 31% of primary members saying service improved this year, it was down from 40% a year ago. Banks and thrifts only scored 20% and 23% respectively, however both showed increases from last year. Banks were up from 16%, and thrifts up from 22%. “They tried to make some hay out of that. Even though credit unions did better, they didn’t grow at the same rate of the banks – big deal,” said Pat Keefe, vice president of communications and media outreach for CUNA. An Online Drubbing The real news of the study came in the online portion. It’s here where credit unions flexed their high-tech muscles. A whopping 24% of primary credit union members reported that they use their credit union’s online bill pay system. That number is up from 15% last year and towers over bank customers’ 11% usage. Thrifts did well, but not as well as CUs, at 20%. This puts the overall bill pay usage figure for all consumers at about 15%, a number slightly over long held beliefs of 10-12% adoption. Credit union vendors dealing with bill pay weren’t hiding their excitement or their admiration of CUs’ efforts in getting members to use the service. “Credit unions historically have been quicker to adopt new technologies than banks, and push those technologies to their members. This is a reflection of credit unions offering better quality services,” said Leigh Philobosian, vice president of marketing for Mid-Atlantic Corporate FCU, Middletown, Pa. The corporate has become one of the leading providers of bill payment in the CU industry. Philobosian said CUs can adapt to these new technologies faster than banks, because they are so much “leaner” from an operational standpoint. Marc Honesberger, director of product management/bill payment and platform for Digital Insight, Calabasas, Calif., said there are three key reasons CUs are out front with bill pay. “The first driver we find is cost. Credit unions are more apt to give the service away for free or subsidize the cost. Second is ease of use, the ease of interface. The earlier versions were cumbersome and daunting to the user,” said Honesberger. But CUs now have slick sign-up pages, and functionality is simplistic for the user. The third factor, said Honesberger, is member service. Credit unions have the information at their fingertips now, and they’ll pass it on to members. Honesberger said in the early days of bill pay member concern over where a payment was in the process often went undressed, but today’s systems allow CUs to give specific payment information. There was also good news for online banking. Apparently consumers have really warmed up to the service. Some 32% of respondents that have a PC said they have used online banking, that’s up from 22% last year. Account aggregation, which many financials are on the fence about, did take a serious blow. Only 19% of respondents said they were very interested in the service, while 51% said they were not interested. Wireless services took a hit as well. An overwhelming 78% of respondents said they were not interested in conducting financial transactions over a cell phone or PDA. Only 8% were very interested. Credit unions can learn a lot from the survey about what their different age segments of members are looking for, and that is nontraditional CU services, especially among younger members. Possibly due to the hammered stock market, respondents said they are looking for financial planning from their financial institution. In the 18-34 age group, 70% said they were interested in financial planning. It was high in the 35-44 and 45-54 groups as well, at 46% and 45% respectively. It’s showing CUs they may want to get financial planning on their product menu. The 18-34 age group was also the most interested in brokerage services at 45%. That dropped to 28% for the 35-44 segment, and 27% for 45-54. Credit unions of course have been jumping into brokerage in the last few years. In `financials’ we trust With all the corporate shenanigans going on, just how much trust and faith do consumers have in the financial services industry? It looks like the Enron’s and WorldCom’s of the world have hurt trust somewhat. While 91% said they had “some” or “a great deal” of confidence in the safety of the financial system, those saying they have “a great deal” of confidence dropped to just 40%. Another 7% said they had “very little” confidence, up from 5% last year. Just 82% consider the system healthy, down from 90% last year. “Very healthy” and “fairly healthy” respondents also dropped to 18% and 64% respectively. Consumers are also concerned that their financial is releasing their information to a third-party without their permission. Some 62% said they were concerned this might happen, while another 23% said they’re sure their financial has already done something to violate their privacy. Banks however do seem to have more trust than other institutions. For example, 44% of bank customers said they have more trust in their bank than their mutual fund company. Another 48% said they have more trust in their bank than their insurance company. The survey also compared banks with CUs. Forty-percent of consumers whose PFI is a bank, but also use a CU, said they have more trust in their bank than their CU. [email protected]