Customer satisfaction with banks improves slightly
January 04, 2011
Customer satisfaction with bank services, such as checking accounts, savings accounts and personal loans, rose slightly in the last year, but has yet to return to levels reached before the financial crisis exploded, according to the American Customer Satisfaction Index annual report for financial services released in December.
The index, founded by the University of Michigan's Ross School of Business, releases yearly results for various sectors of the economy each month.
The customer satisfaction index for banks and credit unions rose 1.3 percent to 76. Small banks and credit unions, as usual, scored better than big banks. As an aggregate, small banks scored 80--seven points higher than Wells Fargo, the highest scoring large bank.
"Their emphasis on individualized service and personalized customer relationships plays a large role," Claes Fornell, the Donald C. Cook professor of business administration at the University of Michigan, says of small banks in commentary published with the December index.
Customer satisfaction with credit unions drops
Credit unions also scored 80, yet their score represented a 5 percent decline from last year. Bank scores remained level or increased slightly, except for JP Morgan Chase, which fell by one point, its fourth straight annual decline.
Index scores for the four large banks included in the index are:
- Wells Fargo: 73
- Citigroup: 69
- Bank of America: 68
- JP Morgan Chase: 67
Since 2006, customer satisfaction with Wells Fargo and small banks has improved by one and two points, respectively, but has declined for Citigroup, Bank of America and JP Morgan Chase, all which of which scored 72 four years ago. Credit unions were not included in the index until 2008. As a group, they scored 84 in 2008 and 2009.
Index researchers say the decline in customer satisfaction with credit unions could be due to their rapid expansion to include more mortgage and investment banking activity. Some credit unions have also taken financial losses.
"Since credit unions can't raise capital by selling stock, the only recourse to recover losses is through cost-cutting, which usually leads to reduced customer service, or raising fees, which leads to higher customer cost," Fornell writes. "Nevertheless, credit unions--offering significantly higher levels of customer satisfaction for a fairly wide range of services--remain a viable alternative to large banks."