Key findings from the new J.D. Power and Associates 2009 Banking Purchase Funnel Special Report show that customers’ choices in institutions are leaning more toward reputational and convenience factors, as well as a banks’ showcase of innovative products like mobile banking and debit rewards programs.

 The report states that a “bank’s brand image and reputation—particularly as influenced by recent events covered in the media—have a strong effect on consideration, and specifically, active avoidance,” according to a J.D. Power release. Thirty percent of respondents in the survey would exclude a bank from their shopping list “due to perceived financial instability, the bank’s bad reputation, or its questionable ethics.”

The biggest “driver of avoidance” is having a bad experience, as 30 percent of surveyed customers responded, and was trailed by “poor branch proximity/operating hours” at 16 percent. That was closely followed by high rates and fees and similar policies, which came in at 15 percent. Bad reputation (11 percent), perceptions of financial instability (11 percent), and ethical concerns (8 percent) are sore parts too, the results show.

Convenient branch locations remain a leading factor in choosing banks, at 27 percent, but good experiences with services (16 percent) and gift or cash rewards (12 percent) also weighed heavily. “The importance of innovation is somewhat unexpected, considering that many consumers perceive banks to be largely conservative,” said Rockwell Clancy, executive director of financial services at J.D. Power. “This suggests that being on the leading edge with new products is an actionable way to differentiate an institution from the competition. What may be emerging here is a fundamental redefining of ‘convenience.’”

“We also looked at people who switched institutions,” notes Clancy. “About 25 percent said they actively shopped but didn’t switch, and 50 percent changed an account but not their primary institution.” Of the remaining 25 percent who moved to another bank “28 percent switched on the positive recommendation of someone they knew and 25 percent because of more convenient branch locations,” Clancy says.

The 2009 report was based on surveys of 7,500 customers at 25 major banks.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.