Raddon Financial Group (RFG), a provider of research-based solutions to financial institutions and a strategic business unit of Open Solutions, recently completed a national survey of consumer attitudes about the nation's four largest banks, all of which were recipients of TARP money.
The nationally representative survey of 1,155 consumers, fielded in February of this year, found a lack of consumer interest in banking with the Big Four (Bank of America, Chase, Citibank and Wells Fargo). One-half of consumers have a banking relationship with one of the Big Four banks. While 63 percent of current customers remain loyal to these banks, indicating that they are either "extremely likely" or "very likely" to continue as customers, the remaining 37 percent are less likely to continue banking with them, and 12 percent said that they were "not very likely" or "not at all likely" to remain customers. For institutions competing against the Big Four, 12 percent represents seven million customer households that may be looking for a new bank or credit union.
The opinions of non-customers are even more troubling for the Big Four. When non-customers were asked how likely they were to become a customer of one of the Big Four banks, no one indicated that they were "extremely likely" to become a customer, and less than one percent said they were "very likely" to become a customer. Eighty-eight percent said they were "not very likely" or "not at all likely" to become a customer of one of the Big Four banks.
"With such a large number of respondents to the survey, it is rare to see a zero percent response to a question in a consumer survey," said Bob O'Meara, vice president, director of research for Raddon Financial Group. "Consumers are clearly reacting to the financial crisis, which appears to be seriously limiting the Big Four's ability to acquire new customers."
The study also revealed that community banks and credit unions might significantly benefit from the waning consumer opinion of large national banks. When asked about the impact that the banking industry crisis has had on their future choices of financial institution, 63 percent said they would consider a "local bank" and 43 percent cited a credit union as their preference.
"In order for community banks and credit unions to attract customers from the Big Four, they'll need to be strong in technology, convenience and service. Customers of the Big Four enjoy the convenience of multi-branch and ATM access. They also have high adoption rates for electronic channels, like online banking, mobile banking, text alerts and e-statements," added O'Meara.