The least trusted banks in America
February 10, 2010 · Tagged with Banking and Budgeting
According to Mr. Doyle, customer advocacy rankings are a predictor of customer retention and attrition, and customers who rate their financial service firms high are more likely to consider their firm for additional products. In contrast, customers who give their banks a low ranking are most likely to switch in the next year and are “going to be reluctant to put any more money and open new accounts at those institutions,” Mr. Doyle said.
This means the low rankings don’t bode well for the bigger banks, many of which are reaching federal limits for how much they can increase deposits by acquiring other banks and must rely on attracting more customers to increase revenue.
Credit unions ranked much higher than the big banks, as they have in previous years, with 70 percent of credit union customers saying their financial institution puts their interests first. Mr. Doyle said this is because of credit unions’ different operating model — they are owned by customers — and because they tend to emphasize customer service.
After credit unions, the bank run by USAA, a financial services company that serves the military and their families, came in next with 64 percent of its customers agreeing with the statement. It was followed by ING Direct, with 46 percent. Regional banks including PNC, U.S. Bank and BB&T came in next with rankings similar to Wells Fargo/Wachovia. Regional banks, which often can’t afford big advertising campaigns, tend to emphasize customer service, Mr. Doyle said.
Insurance firms, meanwhile, remained the highest rated firms for customer advocacy, with more than half of all customers rating their insurers high on customer advocacy and insurers representing two-thirds of the firms in the top half of the rankings. The ranking of investment firms, meanwhile, fell below banks for the first time since the rankings began. Investment firm rankings tend to fall when the market isn’t doing well, Mr. Doyle said.