Consumers love credit unions and hate banks, right? Turns out it’s not that simple.
A new study finds consumer satisfaction with the financial services sector at its highest level in years, but CUs’ advantage over the traditional banking sector has essentially been wiped out — at least when it comes to satisfaction rates.
The latest edition of the American Customer Satisfaction Index, released Tuesday, revealed a 1.4-point increase in customer satisfaction rates for the finance and insurance sector to a total score of 78.3 (on a scale of 0 to 100). And while banks and credit unions each have an ACSI score of 81, their scores are trending in opposite directions — banks are stayed level while credit unions have seen a drop of 1.2 points year over year.
“The 2008 financial crisis was a boon for credit union membership,” ACSI managing director David VanAmburg said in a press release. “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.”
ACSI’s study found CUs only edge banks by one point when it comes to in-person service (89 points for credit unions versus 88 points for banks), and CUs hold an edge in speed of service both at the branch (88 points to 85 points) and at the call center (84 points to 81 points). But big banks carried the day in mobile banking, exceeding CUs’ scores both for quality of service and reliability.
“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.”
The one bright spot for credit unions is that while banks’ satisfaction rates held steady, major national banks dropped to the bottom of the banking sector, with an ACSI score of 77. That’s not to say that consumers hate the big banks, however. Chase saw a 1-point bump up to a score of 80, receiving high rankings from customers for mobile banking and easy-to-access branch locations — a major factor for credit unions, which often claim they can beat the big banks for branch access thanks to massive nationwide shared branching networks.
Bank of America's score fell 1 point, to 76, while Scandal-plagued Wells Fargo sits at 74 for the second consecutive year.
Regional and community banks, which are often said to share similar consumer-focused business models to credit unions when compared with the big banks, pulled a score of 84 overall, a 1.2-point dip in satisfaction. Regionals and community banks outperformed their national counterparts in nearly every area of the customer experience.
CO-OP, Mastercard look at members' pain points
Those insights come as CO-OP Financial Services has released a new white paper in partnership with Mastercard Advisors detailing how credit unions perform across more than a dozen different member engagements, including applying for membership, making service complaints or balance inquiries, opening investment accounts and more.
Notable among the findings was that nearly 60 percent of respondents said they would be likely to decrease the amount of business they do with their credit union after high-stress interactions with the institution.
CO-OP and Mastercard Advisors found that simple, front-end interactions such as joining the credit union, making a balance inquiry, or requesting additional credit or debit cards generated the most positive member emotions while more complex interactions such as fee disputes, mortgage applications and financial planning were more likely to result in negative feelings toward the institution.
“Member journeys that require progress updates, richer explanations or additional direction seem to be where credit union member expectations are not being met today,” CO-OP CEO Todd Clark said in a press release. “This is where technology integration, allowing credit union employees seamless access to a complete member profile across products and services, can have a dramatic impact on the overall member experience.”
The study also found that just 23 percent of members surveyed had applied for a credit card in the past five years, which CO-OP said indicates a potential growth opportunity for CUs.
Overall credit card lending at credit unions rose 7.9 percent in August to $59.8 billion, according to the most recent Credit Union Trends Survey from CUNA Mutual Group.
