A top researcher for J.D. Power & Associates warned credit unions Monday against “popping the champagne corks too early” in expecting sustainable gains from Bank Transfer Day, considering ongoing statistics show real consumer intransigence about moving accounts.
“It’s really too soon to know whether the spin translates into sizable shifts into credit unions,” declared Michael Beird, director of the banking services practice for the Los Angeles-based consulting house.
Beird said the firm’s most recent surveys show 28% of consumers move accounts because of life-changing events like moves and marital status, while 17% switch because of frustration or anger over price changes. On that, “we don’t have the data yet but that percentage could certainly increase” to the benefit of credit unions, Beird said.
Consumer inaction in moving accounts continues to be a key factor in holding down big CU gains since “in the old days it used to be mortgages that kept account changes but now it is technology, online bill pay, mobile applications and the rest” that has contributed to intransigence, Beird said.
Beird, who is based in Chicago, said he appreciates the Bank Transfer Day “noise” generated by community banks and CUs over the last six weeks in impacting Bank of America and other large banks, but asked “what is the directional trend in the quality of these customers that have moved out?” He said it remains to be seen what percentage of the “high quality” accounts may shift into CUs, said Beird.
The J.D. Power researcher also disclosed that the firm expects to once again include CUs in its upcoming banking trends surveys. Those stats, Beird said, currently rely on some 135 large banks with at least $2 billion in assets for analysis, and in the past the sampling of CUs proved unworkable.
“We now believe we can capture the data,” he said.
Beird also maintained that Bank of America clearly misjudged the market by its debit fee approach and like other large banks its brand image has been damaged.
J.D. Power research, however, does show that customers like what big banks offer, including a full range of financial products, broad ATM networks and numerous branches around metro areas, he said.
Convenience and branch density remains key factors in customers looking to move accounts, he said. It is also true that “fees don’t motivate everyone,” observed Beird.