Online and mobile banking is boosting convenience ratings of credit unions, helping the cooperatives catch up to big banks, market research firm Chadwick Martin Bailey said Wednesday.
A February 2012 survey of 1,400 consumers revealed that credit union members use online banking as much as bank customers, and in addition, give credit unions higher service ratings, the company said in a new report.
“These findings suggest a new banking value proposition is emerging,” said Jim Garrity, managing director of the Boston-based firm's Financial Services practice. “The growth of online and mobile banking services means convenience and accessibility don't belong solely to large bank customers.”
Ten years ago, the firm said in the report, consumers who valued convenience chose a bank, while those who valued service joined credit unions. However, credit unions are closing the convenience gap and enhancing their value proposition, as larger banks struggle to positively differentiate themselves without the convenience advantage, the report said.
Credit union members reported that branches have less to do with convenience than bank customers did. Just 58% reported that a nearby branch was importance, compared to 50% who reported that online services were key to convenience. Comparatively, 65% of large bank customers valued branches compared to 46% who favored online services. Nearly 70% of community bank customers valued branches while just 35% felt online services were important components of service.
Credit unions blew the field away with remote service satisfaction, with 85% of members giving a thumbs up to their credit union's online and mobile services.
Sixty-six percent of large national bank customers were satisfied with their online and mobile services, but just 55% of community bank customers and 53% of regional bank customers reported satisfaction.
As a group, 42% of participants reported using large national banks as their primary financial institution; however, credit unions tied for second with regional banks, with 21% of respondents each. Community banks claimed just 13% of the PFI pie.
Additionally, credit unions came out on top in length of relationship, with the average credit union tenure lasting nearly 17 years, compared to an average national bank relationship of 13.5 years. Credit unions also came out on top when participants were asked to rate the value of their PFI relationship: 85% reported receiving value from their credit union relationship, compared to just 56% at large national banks and 52% at regional banks.
Community banks fared better in the value proposition, scoring a 72% value rating from their customers.
The report is available for free with registration on Chadwick Martin Bailey's website.
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