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Satisfaction among credit union members and bank customers with their primary financial institution during the pandemic dropped considerably, and members and customers who are planning to switch to a new financial institution has nearly doubled, according to a new study from Foresight Research in Rochester Hills, Mich.
"The average decline on specific satisfaction metrics dropped 4% – considerably less than expectations," reported Foresight Research, which surveyed more than 10,000 randomly sampled households in 44 metropolitan markets from December 2019 to March 2020. In July 2020, the research firm also conducted a second sample of 661 surveys with the same respondent profiles and questionnaire.
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"Customers and members are less satisfied with ATMs and digital banking, which may reflect higher frequency of use or frustration as digital falls short of branch capability during this time of closed lobbies and limited hours," the Foresight Research report concluded. "Further, handling problems and good reputation have taken a hit likely resulting from limited face-to-face interaction with personnel."
Foresight Research also reported that customers of community banks are considerably more dissatisfied while credit unions have generally maintained pre-COVID levels of satisfaction.
However, when consumers were asked about their overall satisfaction with their bank or credit union, Foresight Research found no significant difference pre-pandemic and during the pandemic.
"This likely results from lower expectations and a feeling of empathy for banks and credit unions," the report read. "The 'we are all in this together' attitude may have played a role in overall satisfaction. Importantly, expectations dropped much more than satisfaction, resulting in an unexpected 'forgiveness' from customers and members."
Nevertheless, consumers who intend to switch to a new financial institution has almost doubled.
Pre-pandemic intention to switch in the next year or two was 12%, but that increased to 22% during the coronavirus crisis, while the large multi-location brands have the greatest risk with an intended churn of 27%, according to Foresight Research.
To make matters worse, consumers who are expected to switch is concentrated among Gen Zers and millennials.
"Increased priorities put on interest rates and fees among switchers was reported," according to Foresight Research. "This may be the result of furloughs and underemployment, lower interest rates and time to spend on investigating new banking relationships."
Three out of four credit union members or banking customers said all access channels, including convenient locations, mobile, ATMs and online banking, to be extremely or very important to maintaining a banking relationship during the age of COVID.
Interest rates and fees play an important role, but they are less important than good banking operations such as transaction accuracy and handling problems, Foresight Research found.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
