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How vulnerable are big banks?

By David McMillin ·
Wednesday, November 16, 2011
Posted: 3 pm ET

While many customers have already ditched big banks over the past few months, a new study shows that the nation's financial giants have the potential to lose many more account holders throughout the next year.

Management consulting firm, cg42, recently released the findings from its 2011 Retail Banking Vulnerability Study. The study surveyed more than 5,600 customers to examine a wide range of consumer frustrations at America's 10 biggest banks. From limited branch hours to inadequate customer service to statement errors, the study used negative consumer attitudes to determine which banks are more vulnerable to losing depositors. The total projected loss of deposits from the biggest members of the banking industry over the next 12 months? A whopping $185 billion.

Here's a breakdown of the results, ranked in order from most vulnerable to least vulnerable.

1)      Bank of America

2)      Citibank

3)      Wells Fargo

4)      Capital One

5)      Chase

6)      TD Bank

7)      BB&T

8)      U.S. Bank

9)      SunTrust

10)      PNC

Not surprisingly, Bank of America tops the charts for customers most likely to switch, but the study's findings indicate Wells Fargo has the most at stake. While all of these banks could lose customers if they fail to address consumer complaints, Wells Fargo's projected deposit losses are an estimated $48 billion.

On the more positive end of the spectrum, PNC proved to be a customer service standout with respondents voicing fewer issues with long wait times or lack of live help. While the bank received negative scores in some categories, it seems its attention to customer service made up for frustrations with fees.

The most common frustrations in the study were "being nickeled and dimed," "not offering competitive rates" and "being hit with overdraft charges." While I understand the first two, I feel overdraft charges are an easily avoidable frustration. Account holders must opt in for overdraft protection, and mobile banking alerts are easy ways to alert potential low balances.

Regardless, $185 billion certainly sounds like a lot of money that could move toward credit unions and community banks. Do you think it actually will? Will customers at big banks give up the convenience of branch locations and ATM networks for fewer fees and fewer frustrations?

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December 21, 2011 at 3:40 pm

I don't understand how you can complain about a big bank not offering a competitive rate, they don't want money right now, banks want to lend it out since rates are terrible anyways and they have too much. Simple supply and demand, if banks have too much money, rates are low, if they need money, rates go up. There is no such thing as a competitive rate. Go for a low overhead online bank if you want a slightly better than bad rate of return on a CD.

David McMillin
November 17, 2011 at 10:19 am

Thanks for reading, S.E. Day. Your thoughts confirm another key finding in the study. 71 percent of respondents agreed with the following statement: "Banks claim they have my interests at heart, but all they really care about are their own interests."

S.E. Day
November 17, 2011 at 8:28 am

I think the banks have operated in a disconnected manner for far too long. This disconnect leaves their customers wondering if the banks care about them at all. I believe top-echelon bankers have been operating a dysfunctional financial system with record rewards for so long that they feel making money on the backs of their customers is a Right! As a consumer and credit union advocate, I have been promoting Bank Transfer Awareness Month as a way to keep the pressure on the banks. Since it is the consumer's money being used to sustain the healthy lifestyles of mega-banks and their controllers, I feel consumers have the real Right to choose. I encourage them to seek out credit unions and experience a difference. Credit unions are no longer the red-headed stepchildren of the financial world.