AUSTIN, Texas — Credit unions and other community financial institutions have an opportunity to gain additional market share from big banks this year, according to new study, but CUs will still have to overcome some familiar obstacles.
BancVue's latest Consumer Banking Insights Study was conducted online by Harris Poll in December by querying more than 1,000 U.S. adults (ages 18 and up) on behalf of more than 200 community financial institutions that offer BancVue's Kasasa brand of checking accounts.
The study found roughly half of so-called megabank customers (46%) do not feel very loyal to their primary bank, while 49% said banking locally is important.
More good news for CUs: many big bank customers (43%) are not satisfied with their primary bank. More than half (58%) of megabank customers do not believe their primary bank has their best interests at heart, and 42% feel their bank takes advantage of them with fees.
In contrast, an overwhelming majority of members/customers of community financial institutions (93%) said they trust their CU/bank and feel very loyal (84%) toward their institution.
Many Not Ready To Switch
Despite the sentiment, BancVue said its research found megabank customers' dissatisfaction alone is not enough to get them to switch institutions. While nearly 1 in 4 (23%) megabank customers say they are at least somewhat likely to switch their checking account to a local credit union or community bank this year, 63% say they have never considered opening a checking account at a local community financial institution.
Nearly one-quarter (24%) of megabank customers say they do not use a community financial institution because they do not believe a CFI can offer the same benefits. Worse, 83% of megabank customers say a recognizable brand name — which BancVue noted is not a traditional strength for CFIs — is at least somewhat important to them when choosing an FI.
"This study found that many Americans are looking for roughly the same things from their financial institutions-a trustworthy, dependable relationship, and few or no fees," said Gabe Krajicek, BancVue's CEO. "Community financial institutions are able to meet most of those needs, and it seems consumers are finding that megabanks are not."
However, Krajicek said, to better compete with megabanks CFIs will need to boost their marketing efforts and product lines.
"Branding influences so many of our decisions, including our banking choices," Krajicek said. "It is important for community financial institutions to take a hard look at their branding and marketing strategies. If their efforts are falling short, there are solutions out there that they can — and should — take advantage of."
BancVue said in the Consumer Banking Insights Study figures for age, gender, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting also was used to adjust for respondents' propensity to be online.
