While US consumers tend to be very loyal to their banks, 15% left major banks in just one year, mostly due to dissatisfaction with their service. Higher income consumers are more likely to be dissatisfied with their service at a bank, and more likely to have accounts at multiple banks. Below you will find a deep dive of our findings.
A NOTE ON METHODOLOGY
Since the purpose of this project is to attempt to ascertain customer attitudes, we primarily based our study on surveys of bank customers. Per the project specs, we utilized only those surveys and other sources that had been published within the past five years. In accordance with the project specs, we looked for distinctions in attitudes between those earning under $75,000 annually ("lower income") and those earning $75,000-$150,000 ("higher income"). However, most sources did not include segmentation by income (most segment by age, if at all), and so in several cases we could only provide generalized information on a given part of the question.
Likewise, despite a thorough search, we could not find any public surveys which segmented urban vs suburban and/or rural areas, and consequently are unable to provide even a triangulation for this criterium.
WHY DO THEY LEAVE?
On the one hand, US consumers show an outsized loyalty to their banks: "The average U.S. adult has used the same primary checking account for about 16 years, according to a survey conducted for Bankrate and MONEY. More than a quarter (26 percent) have held onto a checking account for more than 20 years." On the other hand, 15% of customers left behind large regional or national banks in 2016. Of these, 11% switched to an online or virtual bank and 3% for a payments provider. Only about 1% went to a local community bank or a credit union.
Based on a 2015 Credio survey, Arca summed up the reasons why customers leave: "The biggest reason is customer service. A few other key factors include the variety of accounts and website satisfaction. These tie back into ease of use and convenience. Consumers want to use one bank for a wide range of needs, and they want to do it on their schedule. Technology, like online and mobile banking, can help with that."
Those in the lower income bracket are 94% likely to say that their bank at least meets their expectations, with 36% saying it exceeds them. Those in with higher income are just as likely to say that the bank meets their expectations, but less likely to say it exceeds them (31%). Both income brackets are 58-59% likely to say that they have received exceptional customer service, but those in the $75-150K range are the most likely to say it (64%). Interestingly, lower income customers are less likely to say that they have been frustrated or disappointed by a bank (42%) than those in the higher income bracket (46-49%).
INCENTIVES TO CHANGE OR STAY
Nearly half (45%) of customers say that they would change banks if they were offered discounts on purchases that match their interests. Despite this, 67% don't participate in a bank loyalty program, and 17% don't even know if their bank offers one. Nearly two-thirds of US banking customers are willing to share their data with their primary bank to receive personalized discounts and products, and that number climbs to 76% among higher income customers.
Another 43% would change in return for help in the car buying process, 41% for help with purchasing a home, 40% would leave for a bank that provided more personalized service, 39% for help in proactively managing and paying their bills, and 39% would leave for a bank that provides "actionable financial advice on a proactive, real-time basis."
SELF-SERVICE VS BRANCH SERVICE
While most customers (68%) believe that online and mobile self-service channels makes doing business easier, younger customers (86%) and high income customers (73%) are more likely to say so. High income customers are more likely to use a bank's website (88% to 81%) but surprisingly are less likely to use an ATM (44% to 50%), a mobile app (40% to 47%), or a mobile web page (19% to 25%) as those in the lower bracket. Mobile banking is on the rise, up from 33% adoption in 2013; but only 24% made a mobile payment in 2016. A full 60% use some form of online banking on at least a weekly basis.
Interestingly, 79% of consumers would be willing to take investment advice that is "entirely computer-generated, without any input from a human advisor," and that number increases to 83% among high income customers.
While customers like the convenience offered by banking remotely, there's at least one point in which there is a massive disconnect between consumers and bankers, and that is social media. Only 24% of consumers were interested in social media as a banking channel in 2016, and that was down from 27% in 2015. Bankers did not get that memo, and 37% called "growing more involved on social media" one of their greatest opportunities going into 2017.
Nevertheless, the clear majority of consumers still use their bank branches, with one study saying 87% and another saying 65%. This use is the same in both income brackets, and 24% prefer to go to the branch over all other methods. For 49%, the reason is that they feel more trust when speaking to someone in person, 47% believe that they receive more value from their bank in person, and 40% like their overall experience at the branch. For this reason, Arca points out that having conveniently-placed bank locations (or not) is still a major factor in drawing and retaining customers.
USING MULTIPLE BANKS
Bankrate extols the virtues of having accounts with multiple banks, and fully half of Americans follow that advice, with 28% having two, 11% three, 4% four, and 7% having five or more banks. While we were unable to locate a public source detailing which income bracket is more likely to have multiple banks, we can make an inference: Those age 18-24 are 58% to have only a single bank, as are 52% age 25-34, only 45% of those age 45-54 (9% of which have five or more banks), and 52% of those age 55-64. Age 45-54 is precisely when a man's pay peaks at a median of $102,000. Likewise, women, whose pay generally peaks at about $60,000, are more likely to be loyal to one bank than men (53% to 47%). Ergo, those in the higher income bracket will be more likely to have multiple bank accounts, though we lack sufficient information to triangulate a percentage.
As we have seen, higher income bank consumers ($75-150,000) are more likely than lower income consumers to be dissatisfied with their bank experience and to have accounts with multiple banks. While consumers are increasingly adopting both websites and mobile services to conduct their banking, they still overwhelmingly wish to have access to a bank branch. While most bank customers are content, nearly half would change banks if offered the right material incentives.