LAKE FOREST, Ill.—Financial services consumers receive the “friendliest service” in Minnesota and the “least friendly” service in Ohio, according to a new report.
The study from Moebs $ervices also reveals that offering a friendlier approach on checking accounts will not only improve account holder satisfaction, it will also increase checking account profitability.
The release of the state rankings for friendliness in financial services follows a previously released survey by Moebs $ervices that named San Antonio the friendliest city in the nation and Baltimore the least friendly, as CUToday.info reported here.
Moebs $ervices in June surveyed more than 3,800 financial institutions to determine which state delivers the friendliest FI service. The company defines friendly financial service as providing consumers not only what they need, but also what they want.
'Friendship Index'
To arrive at that conclusion, Moebs said the study’s “Friendship Index” measures 11 factors that appeal to the consumer, including: offers free checking, offers more checking accounts, low overdraft price, offers opt-in for debit card and ATM ODs, offers daily OD cap, offers de minimis, no charge on deposit transfers, no charge on line of credit transfers, provides reloadable prepaid cards (RPC), provides a mobile app, utilizes check deposit using the app.
A detailed summary of the states and components is available by clicking here.
The top five states: Minnesota, Massachusetts, Oregon, Virginia, and Missouri, respectively, all have at least eight of the 11 factors that were above the national average, explained Moebs.
Minnesota is above average in the following: offering free checking, OD price (below average), no charge on deposit transfers, offers both de minimis and daily OD caps, and offers both an RPC and a mobile app.
“Minnesota comes in first all around, but when looking at each factor individually, it comes in first for the most institutions offering daily OD caps,” said Moebs.
Massachusetts ranked No. 1 in two categories: institutions that offer free checking (82.1%) and institutions that offer opt-in for debit card and ATM overdrafts (90.3%
Michael Moebs, Moebs $ervices
). Oregon ranks No. 1 for institutions offering apps, at 92.9%.
“The banks and credit unions in these top five states show a willingness to put the consumer first,” said Moebs. “The results show that offering a friendlier checking option can create greater revenue. Most markets in these states are very competitive. So offering a friendly service paid off by creating more usage and volume from appreciative consumers.
“Most of the worst states were not consumer friendly across the board,” noted Moebs.
Rounding Out Bottom Five
After Ohio, at the bottom are Nevada, Florida, Arizona and New Jersey, respectively.
“With these unfriendly states having at most five out of 11 practices above average. Ohio and Nevada are the two last ranked states overall and came in last when looking at several factors individually,” said Moebs. “These factors include: low percent of institutions offering free checking, offers the least amount of checking accounts, least amount of institutions allowing opt-in for debit card and ATM overdrafts, least amount not charging for transfers, and least number of institutions offering de minimis.
The study compared the Friendship Index to each state’s fee income and expenses. While Minnesota and Massachusetts rank very high on the consumer Friendship Index, they have below average fee income, explained Moebs.
“However, when comparing both states’ low expenses to the overall fee income, we see that they are some of the most profitable states,” said Moebs. “Nevada overall has very high expenses, but is able to offset this by having the highest amount of fee income.”
Moebs emphasized that when consumer needs and wants are met, they use the service more, which in return increases revenue. He explained that is key to checking account profitability.
“Friendly practices for the most part come at a cost,” said Moebs. “However, if they are implemented correctly, the cost is offset by much more volume, which as a result increases revenue.”