By Ray Birch
ANN ARBOR, Mich.–It’s now become clear that what was once considered an alarming finding—credit unions falling behind banks in a highly respected national consumer satisfaction survey—is an established trend, and it may not end soon if CUs can’t improve their digital presence, according to one expert.
As CUToday.info was first to report, for the third year in a row the nation’s credit unions have not only again fallen behind banks but also hit another “historic low” when it comes to consumer “satisfaction” with their financial institutions in the 2021 American Consumer Satisfaction Index (ACSI).
The findings were a shock to many in credit unions in 2019 when CUs first fell behind banks on what had long been considered a unassailable strength. The CU movement was disabused of any idea the finding was a one-off in 2020, when credit unions again finished behind the banking industry on satisfaction.
Now, the latest survey reveals bank customers are again more satisfied than CU members for a third year in a row.
The reasons, said David VanAmburg, managing director of the American Consumer Satisfaction Index (ACSI), are the definition of service has changed in the minds of consumers—moving away from the personal face-to-face interactions to streamlined e-services—and banks are just better at digital delivery.
Deeper Pockets
VanAmburg emphasized the trend will likely continue as banks have deeper pockets to invest in digital delivery, while credit unions, particularly the smaller ones, struggle to keep pace with their much larger counterparts.
“The value of the old, face-to-face, personal service that credit unions excel at is fading away,” said VanAmburg. “Our surveys show this kind of service just does not mean as much to consumers anymore as does a nice, easy-to-use day-to-day digital transaction,” said VanAmburg, who added consumers will still expect good personal service when they go to a branch. “This is a sea change, and the old way of doing customer service is just going away.”
Credit unions fell 1.3% to a score of 76 on a 100-point scale in the 2021 ACSI study conducted by the University of Michigan in conjunction with the American Society for Quality in Milwaukee and CFI Group. The nation’s banks achieved a score of 78, the same as in 2020.
“The world has been shifting, long before the pandemic, towards more digital banking experiences, more efficient experiences,” VanAmburg said. “Technology is winning the day versus that good old-fashioned customer service. This means that credit unions are not failing at delivering a high level of satisfaction relative to banks in the past few years, but it’s more that this friendly approach to service just does not mean as much to many consumers these days.”
An Accelerated Trend
VanAmburg said the last two years under the pandemic has accelerated the trend as more consumers were forced to use their phones and not their FI branches.
David VanAmburg
“I think banks have done better during the pandemic, in terms of consumer satisfaction, because they were already in a better digital banking position with their customers than credit unions were with their members,” VanAmburg explained. “The banks did not feel a huge impact from the health crisis, it was simply a blip on the radar to them. There were a lot of bank customers when the pandemic hit who said, ‘OK, I can’t go to my branch. So, I will just use my phone, which I have already been doing. I can get cash from the ATM, which I have been doing. I can pay my bills through my bank’s website and mobile app…’ Banks did not feel the effects like credit unions did.”
ACSI’s 2020 report revealed banks outperformed credit unions during the early months of the health crisis. VanAmburg noted that banks outdistanced credit unions even further during the height of the pandemic, despite credit unions bending over backward for their members, giving them loan relief and working with them one-on-one to help them navigate through the pandemic.
‘That Did Not Happen’
During an interview with CUToday.info in 2020, VanAmburg suggested the goodwill credit unions were building with those extra efforts might translate into a higher satisfaction rating this year, and possibly close the gap on banks.
“But that did not happen,” said VanAmburg, who emphasized consumers are placing a greater emphasis on daily transactions—even over loan relief—to define their levels of satisfaction. “Digital delivery trumped these extra efforts.
“It shows up in our data,” continued VanAmburg. “Where credit unions still beat banks handily is on questions that we asked related to customer service, the courtesy and professionalism of tellers, branch personnel and loan officers, the speed, timeliness and correctness and efficiency of in-branch transactions. When consumers go into a branch credit unions are still excelling. But banks are beating credit unions on quality of the mobile app, the viability of the mobile app and website satisfaction. So, logging on to your Chase.com account is winning over that smiling teller and increasingly, during the pandemic, people are going to their electronic devices more.”
VanAmburg said he is concerned for credit unions that this trend of falling behind banks will continue as the definition of customer service continues to evolve.
“I can see credit unions improving their digital delivery, improving in this area. But I don’t see how banks, too, won’t raise their electronic capabilities at the same pace,” he said.
It’s Not ‘Cheap’
What may be adding to credit unions’ lower ranking than banks is small credit unions pulling down the CU score in the ACSI report, VanAmburg said.
“I think the challenge for credit unions is digital is not cheap,” said VanAmburg. “To do it well and do it right you have to be able to invest in these kinds of things. And the big banks, by virtue of being big, just have a much bigger war chest. They've got the resources to create these pretty amazing digital experiences that I think for these small credit unions, not the larger ones, it's just going to be challenging for them to match the kinds of digital innovation the big banks can muster.”