ANN ARBOR, Mich.–Credit unions have essentially lost their long-time point of pride, their traditional lead over banks when it comes to how consumers rate service, according to a just-released survey.
In fact, the same survey suggests credit unions are “trending in the wrong direction” when it comes to perceptions of member service.
It should be noted that the bank vs. CU numbers are overall averages, and that CUs continue to hold a perceived advantage over large banks.
Headlining its findings “Banks Tie With Credit Unions for Customer Satisfaction,” the annual American Customer Satisfaction Index published by the University of Michigan in conjunction with the American Society for Quality in Milwaukee, Wisconsin, and CFI Group, has found “credit unions offer better in-person customer service than banks, but not by much—credit unions score an 89 while banks score 88” (when rated on a scale of 1-100).
The survey also found consumers give just a narrow edge to credit unions over banks with speed of service at branches (88 to 85) and call center satisfaction (84 to 81).
‘Less Incentive to Join’
“The 2008 financial crisis was a boon for credit union membership,” says David VanAmburg, managing director at the ACSI. “Many customers, fed up with big banks, took their business to credit unions where they received better, more individually tailored service. But with the economy much improved, there’s less incentive to join credit unions – particularly if they no longer provide higher levels of satisfaction than banks do.”
While credit unions and banks both have an ACSI score of 81, CUs are “trending in the wrong direction” according to the ACSI, with credit unions seeing a dip in member satisfaction of 1.2% year over year. Banks, on the other hand, remained unchanged in the survey.
Banks were actually rated higher on mobile apps on superior in quality (86 to 85) and more reliable (85 to 83).
“Digital is everything right now, and it’s helped banks close the gap,” added VanAmburg. “With the boom in mobile banking apps, customers don’t even have to go into branches. Depositing checks or applying for a loan through an app is more appealing than the charm of the old-school, small-town customer service offered by credit unions.”
Where CUs Can Improve
In its analysis, the authors of the ACSI said credit unions can improve customer satisfaction by providing more financial services, making it easier to open and change accounts, and offering more competitive interest rates.
The findings regarding credit unions and banks come at the same time customer satisfaction with the finance and insurance sector is the highest it’s been in 24 years in the American Customer Satisfaction Index.
The sector—which includes banks, credit unions, health insurance, property and casualty insurance, life insurance, Internet investment services, and financial advisors—saw a 1.4% bump in customer satisfaction to an American Customer Satisfaction Index score of 78.3 (on a 0 to 100 scale), according to the ACSI’s Finance and Insurance Report 2018.
Chase and Capital One Stand Out
While banks stand steady overall, national banks declined 1.3% to remain at the bottom of banking sector with an ACSI score of 77.
Chase emerged as the highest-rated national bank after a 1% bump to a score of 80. Chase received high ratings from its customers for its mobile banking app and its easy-to-access brick-and-mortar locations and ATMs.
Former category leader Citibank came in second among national banks after falling 2% to 79.
Bank of America dipped below the national bank average following a 1% decrease to 76. Wells Fargo remained in last place with an ACSI score of 74, the same as last year.
Super Regional & Community Banks
According to the ACSI, super-regional banks are second among banks with an ACSI score of 79 that is steady for a third year. Within this category, Capital One and SunTrust Bank distinguish themselves, each experiencing a 1% increase to 81, ACSI reported. TD Bank remained at 80, while Regions Bank dropped 2% into a three-way tie with U.S. Bank and BB&T (each down 1%) at 79.
Citizens Bank moved up 1% to tie PNC Bank (unchanged) at 78. Despite ranking second to last, KeyBank rose 3% to 77, the biggest increase among super regional banks, ACSI reported. Last place Fifth Third Bank, “which could stand to improve its interest rates,” ACSI said, fell 1% to 75.
“Interestingly, regional and community banks lead the category with an 84, despite seeing a 1.2% dip in customer satisfaction,” ACSI stated in its analysis. “These banks outperform national and super regional banks in nearly every area of the customer experience.”
Other Findings
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Despite experiencing the most catastrophes since 2005, property and casualty insurers showcase great strength and resiliency. The industry overall is up 1.3% to 81, as smaller insurers rise to the top following a 4% increase in satisfaction to 83.
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Policyholder satisfaction in life insurance rises 2.6% to 80, thanks in part to New York Life, which landed in first place after a 5% jump to 84.
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Even with the strength of the market, satisfaction with Internet investment holds steady at 79, ACSI said. Edward Jones rose to move into first place with a score of 81.
- Financial advisors saw a 1.2% drop in customer satisfaction to 80. Charles Schwab’s score of 82 remained unchanged from last year, yet it takes the lead by itself atop the category.
The ACSI Finance and Insurance Report 2018 is based on interviews with 25,555 customers contacted between October 2, 2017, and September 26, 2018.