According to a new report from J.D. Power and Associates, the number of customers who left their banks climbed for the third consecutive year.
After numerous reports of Bank Transfer Day figures, the results of the 2012 U.S. Bank Customer Switching and Acquisition Study are not incredibly surprising. Still, the steadily increasing numbers should encourage big banks to truly rethink how they can do a better job of keeping customers. Consider this revealing statistic from the study.
Switching rates at big banks, regional banks and midsize banks average between 10 percent and 11 percent. For credit unions and small banks, that number is a measly 0.9 percent.
Credit unions and small banks haven't always seen those incredibly low numbers. Last year, the customer defection rate for this segment was fairly close to the rest of the banking industry: 8.8 percent. The big drop seems to be an indication customers are putting their institutions under the microscope to determine exactly what they're getting in exchange for their checking and savings accounts.
While bank fees certainly play a role in the decision to switch, the study showed that these additional expenses aren't the only trigger for closing an account. More than half of the respondents who listed fees as a main reason to find another bank also noted complaints about poor customer service. It seems like the combination of sub-par service and above-average fees go hand in hand.
I was surprised by how some of these account holders decide where to move their money. Nineteen percent of respondents indicated they chose their new financial institution based on some type of promotional offering or cash bonus. While it's always nice to receive $150 or a gift card for opening a new checking account, it's important to remember that all banks -- yes, even the "nice" ones -- plan to make that money back over the course of your banking relationship.
What do you think? Are you among the customers who have switched banks in the past year? If so, what was your primary motivator for finding a new home for your personal finances?