NEWPORT NEWS, Va.—The $2.4-billion Langley FCU here has been named the best consumer value among credit unions, according to a new study.
Runner up was the $1.6-billion Connexus CU in Wausau, Wis. The study looked only at credit unions of more than $500-million in assets.
The Kiplinger report, which is the first of its kind the company has published, is based on Moebs $ervices’ 2016 survey data of 11,831 financial institutions, looked for the banks and credit unions—both bricks and mortar and Internet-based—whose services collectively offer the best deals for consumers. TD Bank and US Bank came out on top for banks in a tie for first-place.
“Some institutions are making all the right moves to win satisfied customers,” said Kiplinger in its analysis. “To identify the crème de la crème, Kiplinger is introducing its list of best banks and credit unions. We’ve picked a first-place winner and runner-up—except in the case of a tie—among national banks, nationally available credit unions and Internet banks, plus the best bank in each of four regions.”
Kiplinger also named a top institution and runner-up for each of six wide-ranging consumer profiles: high-net-worth families, retirees, frequent travelers, millennials, students and military service members.
Top institutions on Kiplinger’s list have a mix of no-fee and low-fee basic and interest checking, plus competitive yields on savings, money market deposit accounts and certificates of deposit.
Michael Moebs, Moebs $ervices
“They often reimburse ATM fees, and some offer special perks for students and seniors. And they tend to do digital well, with easy-to-navigate websites and responsive social media teams,” Kiplinger said.
Doing Digital Well
Kiplinger said the review process began with a large number of financial institutions, which was then whittled down.
“To identify the soundest financial institutions, Moebs $ervices applied screens for asset size—to ensure sufficient resources—excess fees, high expenses and sufficient capital. Some 90 features from free checking to safe deposit box were then statistically graded for each financial institution,” Kiplinger explained.
The resulting “universe” included 18 national banks—institutions with more than $25 billion in assets and at least 15% of deposits in two or more regions; 35 regional banks with more than $10 billion in assets, assigned to four regions and then ranked; 22 all-access credit unions—which allow anyone in the U.S. to join—with more than $500 million in assets; and 14 Internet-only financial institutions. For each profile, we started with top financial institutions identified by the Moebs rankings but then drilled down, adding our own research and judgment, to find banks, thrifts and credit unions with accounts and features most appealing to each group.
As Kiplinger explained, the top CUs had to have an open, or community-based field of membership.
Some of the other CU winners were Alliant CU, Chicago, ranked as the second-best deal for students behind Bank of Internet. Langley FCU came in second behind Ally Bank as the best deal for Millennials. And $81.5-billion Vienna, Va.-based Navy FCU and $1.5-billion Andrews FCU, in Suitland, Md., ranked first and second, respectively, as the best deal for military personnel.
The best deal for the wealthy: Citibank and then Bank of America.
“Technology that allows you to bank with your smartphone has made banking services more convenient. It’s also disrupting the traditional, and high-cost, brick-and-mortar-branch model,” noted Kiplinger. “So it’s no surprise that a number of our top picks for the profiles are Internet banks or credit unions that have harnessed technology most effectively.
“Branches are closing at a rapid pace, and of the nearly 12,000 banks, thrifts and credit unions in the U.S., only half will remain a decade from now,” forecast Michael Moebs, economist and CEO of Moebs $ervices, Lake Forest, Ill. “The institutions that can hold down expenses while attracting depositors will be the winners. The best banks are going to be the ones that can handle as much information as possible and clearly present it to their customers.”
Glaring Issue
Moebs stated that a glaring issue the study revealed is that many banks and credit unions are failing to keep pace with the digital delivery demands of their members and customers.
“Take, for example, one of the larger banks in the study that has not really updated its website in two years,” said Moebs. “To ignore digital delivery is to ignore the changing face of banking, which is becoming more mobile based.”
Moebs said that fintechs did not make the cut in the study this time, largely due to the organizations needing to get on more sound financial footing. But he thinks if the report is conducted again in five years, fintechs will make the cut as offering some of the best financial services deals for consumers.
“We will see some new organizations that will rise up, while others fall,” said Moebs. “We may see offerings from those like Google and Amazon that have a lot of money to place into research and build their offerings. The bottom line is that just because you won this year does not mean you will be here in the future.”