CUs Outperforming Banks in Customer Service, Except in One Area

A new customer satisfaction survey from CFI Group shows that credit unions outperformed retail banks in 2018, although banks still beat credit unions in one area.

The Ann Arbor, Mich.-based company’s 2018 year-end Bank Satisfaction Barometer, which surveyed 1,009 people who had a current financial relationship with a bank, was 80 on a 1-100 scale. That score for retail banks was one point higher than it was in 2017, but it was still lower than CFI Group’s Credit Union Satisfaction Index.

“Bank satisfaction historically has run several points lower than the Credit Union Satisfaction Index. Banks closed the gap to two points in 2016, but the gap continues to widen again to six points at the end of 2018,” it reported.

The barometer evaluated seven drivers: branch staff, online banking, mobile applications, branch convenience, information/communications, products and services, and rates and services. Banks received their highest ratings for branch staff (89), followed by online banking (87) and mobile applications (86). Rates and fees scored lowest, at 71.

Despite the fact that overall customer satisfaction with retail banks rose from 79 in 2017 to 80 in 2018, credit unions have scored higher in overall customer satisfaction since at least 2013, according to the report. Credit unions did lag behind retail banks in one area in 2018, however.

“When it comes to resolving customer problems, banks may have an advantage,” CFI Group reported. “Banks received a score of 82 from their customers for handling customer problems, compared to the 74 credit unions received from their members.”

One reason banks may outscoring credit unions on problem resolution is that customer expectations are higher for credit unions than they are for banks.

“Our results underscore the broader point that major banking brands benefit from nearly any opportunity for personal interaction with their customers, including fixing issues, as customers may not expect much from them in this regard. By contrast, credit unions don’t appear to have as much leverage to make hay out of customer issues, perhaps because a higher-touch service expectation may be baked in to their value proposition,” CFI Group explained.

The company noted that continued consolidation in the banking industry may cause bank leaders to put more focus toward measuring and managing customer relationships.

It also found that 68% of the respondents chose their banks because the locations were convenient or because they received a recommendation from someone they trusted.

“Banks operate in an open, competitive environment. It is difficult to offer rates and fees that are substantially lower than competitors. Consequently, it is understandable that only 8% of bank customers choose a bank because of attractive rates and fees,” it said.