NEW YORK-The nation's 10 largest retail banks are at risk of losing $185 billion of deposits over the next year as customers will look to move primary accounts to community and regional banks that they perceive as being more consumer friendly, according to a new study.
The study indicates that $399 billion in customer deposits are in jeopardy or "in play" at those 10 banks, and $185 billion of that amount is projected to exit in the next year. Of the 10 banks included in the study, Bank of America has the highest brand vulnerability, while PNC has the lowest.
The study's authors found that half the respondents are uncomfortable with how large some banks have become; 71% believe their banks do not have consumers' interest at heart; and 70% want to spread their relationships out among several banks.
Release of the study comes as hundreds of thousands of bank customers have fled to credit unions and community banks since Sept. 29, when B of A announced plans, since abandoned, to charge a $5 monthly fee to use its debit cards. CUNA estimated as many as 700,000 people have joined a credit union since then.
The study, conducted by consultants cg42, of Wilton, Conn., is based on a survey of 5,600 bank customers for the company's Brand Vulnerability Index.
More Bad News For Banks
The study had more bad news for Bank of America, finding that 10.3% of the banking giant's customers are expected to defect and move their deposits to another institution in the next year. After BofA, the most vulnerable banks are Citibank, Wells Fargo, Capital One, Chase, TD, BB&T, US Bank, Suntrust and PNC.
The results of the survey follow a much-publicized grass-roots campaign that urged customers of large banks to move their accounts to smaller banks and credit unions on Nov. 5.
Still, even in the face of relentlessly negative publicity in recent years, large banks have had little trouble attracting or retaining deposits. According to recent FDIC data, banks with $10 billion or more in assets grew deposits at a far faster clip than their smaller rivals in the one-year period that ended June 30.
But Steve Beck, the founder and managing partner of cg42, said he expects the large banks to begin losing market share because consumers' frustration "is at an all-time high." He cited "nickel-and-dime" fees, a failure to offer competitive rates on deposits, and overdraft policies as consumers' top three frustrations with large institutions.
