Just 3% of consumers fully abandoned their large banks during the fourth quarter of 2011, but now, 11% of consumers say they’re likely or very likely to switch to a different financial institution sometime in the next year, giving credit unions an opportunity to become primary banking destinations for more consumers.
That’s according to a new report from Javelin Strategy and Research titled, “Bank Switching in 2012: Giant Banks Remain Highly Vulnerable as Customers Weigh Fees and Convenience.”
The report, based on data collected from 5,034 consumers in March, found that a portion of customers of four giant banks – Bank of America, JPMorgan Chase, Citibank and Wells Fargo – are dissatisfied with their financial institutions months after Bank Transfer Day.
Of the four, Citibank and Bank of America are disliked the most: around 25% of Citibank customers and 21% of Bank of America customers have plans to switch to a different financial institution in the next 12 months.
Javelin also found that the 11% of consumers who say they’re very likely or likely to switch financial institutions in the next year represent $675 billion in deposits.
“Giant banks are very vulnerable right now,” said Mark Schwanhausser, senior analyst of multi-channel financial services for Javelin and the report’s author. “These potential switchers have a lot of deposits, and they have large deposits, so there’s a lot of value attached to them. These are the people credit unions could be winning.”
Schwanhausser said while credit unions can’t match large banks in terms of how many branches and ATMs they have, they can replicate the convenience.
“Consumers are looking for overall practicality,” he said. “Credit unions don’t have the branch and ATM networks that large banks have, but they can provide mobile deposit services and allow members to pull out cash at the grocery store using their debit cards, for example. That tells them that they still have access to their money anytime, anywhere.”