Most people are happy with their banks, but they're even happier with their credit unions, according to the 2018 FIS Performance Against Customer Expectations (PACE) study released this week.
The study, which asked 1,788 U.S. consumers to rank the importance of nine performance attributes, found that 82% of bank customers were “extremely satisfied” or “very satisfied” with their banking relationships. That number rose to 92% for credit union members.
“Credit union members once again are much more satisfied, and customers from top 50 global banks are much less satisfied with their banks,” the study said. “Unsurprisingly, customers from large banks — top 50 or regional banks — are most unsatisfied with the fees they incur.”
“While it has yet to hit a tipping point where big bank customers jump ship in favor of the personal service offered by smaller local banks, some of this year's PACE findings suggest it may not be too far off. The big lead amassed by the top 50 global banks in digital banking is quickly evaporating, and consumers can now be served practically anywhere by any bank with the right digital offerings.”
|Digital is the new branch
One driver of that satisfaction may be digital capabilities. The FIS study found that 72% of all bank contacts are now digital, and respondents 52 and younger now use mobile phones and tablets more than they use PCs, ATMs and branches to interact with their credit unions and other financial institutions.
Baby boomers were more likely to use their desktops or laptops for those interactions (54% of their digital interactions were via desktop or laptop); millennials were more likely to use their phones (63% for those age 18-26 and 57% for those 27-37). About half (49%) of GenXers' digital banking interactions came via smartphone.
“In general, 42% of consumers report that they use their bank's mobile app more now than they did a year ago. This highlights a needed shift in strategic thinking for banking providers, especially smaller ones, as their mobile interfaces — not their physical locations or even their personnel — are now the 'face' of the bank,” FIS said.
|No excuses for lack of features
Credit unions and community banks have good reason to keep themselves at the forefront of the digital banking world, the study noted. Consumers now expect them to have the same digital capabilities that large banks have, including things such as mobile deposits, transfers, account opening, digital payments and mobile wallets.
“Given how affordably and quickly such features can be rolled out, these are reasonable expectations,” FIS added.
Digital payment services are one way credit unions and other financial institutions might stay front-of-mind with members. FIS found that 36% of credit unions currently offer digital payments, compared to 39% of direct banks, 36% of the top 50 global banks, 32% of community banks and 30% of regional banks. Thirteen percent of credit unions offered mobile wallets, 10% offered a P2P app, 14% offered virtual cards, 9% offered Venmo, 6% offered PayPal and 3% offered Apple Pay Cash.
|Protect data, keep members
Offering digital capabilities also affects member loyalty, according to the study.
Virtually all respondents (96%) said they believe their primary banking providers ensure their transactions are safe, and 94% said they believe their primary banking providers protect their personal information. It better stay that way, or else, the study results suggested.
“This faith and trust can quickly turn against banking providers. If a security lapse happens, customers are far more likely to switch banks. In fact, one in four U.S. consumers who experience fraud eventually go on to switch banking providers,” the study said.
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