in News > Residential Mortgage
print the content item


The concept of consumer loyalty to banks appears to have gone the way of the passbook savings account.

According to J.D. Power and Associates' 2012 U.S. Bank Customer Switching and Acquisition Study, 9.6% of customers indicate they switched their primary banking institution during the past year to a new provider. This is up from 8.7% in 2011 and 7.7% in 2010.

Acquisition of new customers by smaller banks and credit unions has increased by 2.2 percentage points to an average of 10.3%, up from 8.1% in 2011. Among big banks, regional banks and midsize banks, switching rates average between 10% and 11.3%, while the defection rate for small banks and credit unions averages only 0.9%, a significant drop from 8.8% in 2011.

High fees and low-quality customer service are cited as key reasons behind the customer defections.

"When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet," says Michael Beird, director of the banking services practice at J.D. Power and Associates. "It is apparent that new or increased fees are the proverbial straws that break the camel's back. Service experiences that fall below customer expectations are a powerful influencer that primes customers for switching once a subsequent event gives them a final reason to defect. Regardless of bank size, more than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service."




Latest Top Stories

The 'Widespread Contagion' Of Foreclosure Is Now Contained

RealtyTrac says in its midyear report that foreclosure activity has dwindled back down to historic levels and that it is on track to continue the pace.


New Housing Finance Reform Bill Introduced In Congress

Three congressmen are taking a new crack at balancing public and private involvement in housing finance.


Julian Castro Confirmed As HUD Secretary

The 39-year-old, third-term mayor of San Antonio will replace current HUD Secretary Shaun Donovan, who will next lead the White House Office of Management and Budget.


'Middle Ground' GSE Reform Proposal Would Keep Fannie, Freddie Alive

Proposal provides an explicit government guarantee "but taxpayer money will be protected through adequate private-sector capital and accurate pricing of government reinsurance."


Could Supreme Court Decision Lead To Revocation Of CFPB Rules?

"The Supreme Court decision on the Cordray recess appointment casts doubt that actions taken by the CFPB, via its first and only director, are valid..." said Michelle Garcia Gilbert, managing partner with Tampa, Fla.-based Gilbert Garcia Group.

LenderLive_id1241
Hse SandyHook
Industry Resource
SM Subservicing Directory_id1035
Safeguard_id1295
BSI_id
CMBA_id1228