In a 28-page report titled The State of Online & Mobile Banking, comScore explores nearly every issue and topic financial marketers are wrestling with today. What is the growth rate for online banking? Which online services drive greater engagement? Why don’t more people sign up for online bill pay or PFM? Are consumers aware their financial institutions use social media? What’s the adoption rate for mobile banking, and where is it headed?

In the report, comScore analyzes the state of online and mobile banking activity in the U.S., providing key insights into customer behaviors, attitudes, satisfaction, service usage and mobile adoption.

Mobile Banking Keeps Rising in Usage & Importance

In Q2 2011, 16% of the 234 million mobile users in the U.S. indicated that they conducted some type of financial-related activity from their mobile device in the past month. Nearly three-quarters of mobile bankers indicated interacting with banks on their mobile devices at least once per week, mirroring engagement frequencies seen for online banking use via a desktop or laptop computer.

Three out of every five mobile bankers are between the ages of 18-34, more than double the percentage of those who do not take advantage of mobile banking offerings in this demographic. Mobile bankers are also twice as likely to have a household income exceeding $100K vs. non-users (31% vs. 15%).

Security Concerns Thwart Adoption of Bill Pay

Bill pay continues to receive considerable attention across the industry, as banks increasingly try to grow their engagement with customers using this service. However, among those consumers who don’t use online bill pay, 43% say concerns with security are what keeps them from adopting the service. This signifies as massive 14% jump over 2010, when only 29% cited security concerns. Keep in mind, comScore’s study includes only internet users, so we aren’t talking about technophobes. These are people do a lot of things online, just no paying their bills.

Use vs. Interest in Online Services

A moderate percentage of consumers expressed an interest in various online customer services, such as Personal Financial Management, and security-based services, such as identity theft services. However, adoption of such services was less than half the rate of awareness in many cases (with the exception of account activity alerts), indicating an area of opportunity for financial providers.

Ron Shevlin, a Senior Analyst with Aite, noted the anemic level of interest in PFM in particular. “The comScore numbers are not reassuring for PFM vendors,” Shevlin said. “It might be too late to get Boomers — and maybe Gen Xers — interested in PFM.”

Shevlin also things don’t look good for P2P payments. “Nobody knows about P2P payments,” he said. “This is a cause for concern because a number of the core apps providers I’ve talked to recently are expecting P2P payments to be big, and become a revenue generator for both themselves and the banks that offer it.”

Email Marketing & Communications

With customers increasingly relying on online channels for managing their accounts, e-mail has emerged an effective, low-cost solution for communications. Consumer recall of email is quite strong, with 48% of consumers reporting they’ve received some form of e-mail communication from their primary financial institution in the last six months.

Social Media Struggles to Gain Traction

Even though banks and credit unions have flocked to social media sites, consumers haven’t noticed. A 2012 study by The Financial Brand revealed that 72% of financial institutions are on Facebook, 54% on Twitter and 49% on YouTube. But ComScore found that only 18% of consumers were aware their financial institution had a social networking presence. Four in five customers were either unaware or “unsure.”

http://thefinancialbrand.com/21384/2012-bank-credit-union-marketing-study-results/

Reality Check: Just because a consumer is “aware” their financial institution has a social media presence doesn’t mean they care. Even among those who are “fans” and “followers,” engagement rates are still extremely low.

Download the Complete Report for Free

The comScore State of Online & Mobile Banking report provides a comprehensive review of the digital banking industry, including emerging mobile channels. Results are based on a survey of more than 2,000 U.S. internet users. The study focuses on key trends in customer behaviors, attitudes, satisfaction, service usage and mobile adoption. The report includes 28 charts and graphs, all as equally fascinating as the three contained in this article. You can get your free copy after completing a simple contact form. The report is definitely worth downloading, and comes highly recommended by The Financial Brand. To download your copy, click here.

This article © 2012 by The Financial Brand and may not be reproduced.

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According to a study from Accenture, banks still have a long way to go to repair and improve relationships with their customers. The study suggests consumers who got burned in the financial meltdown are holding a grudge against the banks they blame for today’s economic mess.

Accenture’s research revealed that banking customers are less likely to recommend their provider than last year, despite being more satisfied with the service they received.

It’s as if consumers are saying, “Yes, my bank did a better job. But I’m still very mad at them.”

What’s intriguing is that a similar study conducted in the U.S. by Prime Performance found that consumers rated their individual experiences with financial providers very highly, even though overall trust in the banking industry is down.

More Satisfied… But Less Likely To Recommend

Accenture’s research, which encompassed 4,000 checking customers in the UK, showed that customer satisfaction levels in retail banking improved over the past year. Accountholders satisfied who say they are satisfied with their bank rose from 56% to 60%.

The number of customers complaining about their bank dropped from 17% to 13%. Among those customers with a complaint, more customers were satisfied with how their problem was handled, up from 34% to 39%.

Despite these improvements, the survey revealed that the number of customers who would recommend their bank to family and friends has fallen over the past year, down from 61% to 47%.

This wasn’t the only bad news the Accenture study contained. Only two out of five customers surveyed said they felt their bank was fair and transparent, and the same number said they were getting good value for their money.

“While customers may think their own bank is doing a decent job, the banking industry as a whole still has a long way to go to rebuild its reputation and win back the advocacy of its customers,” said Peter Kirk, author of the Accenture study and head of their UK banking division.

“In order to rebuild relationships, banks need to invest more in improving customer service,” Kirk added. “They should also look at rewarding customers through loyalty schemes.”

At least Kirk sees a silver lining. “These results show that the banks’ efforts to fix underlying service issues and engage better with their customers are working.”

Good News: Customer Switching Declines

“There is a clear problem that customers perceive the switching process to be overly cumbersome.”

Accenture’s survey showed that switching levels among UK banking customers declined in 2011. Only 11% of respondents said they had recently switched one or more products from their bank, compared with 16% a year ago. Similarly, research from Prime Performance found that U.S. consumers said they were less likely to switch… but that was back in the first half of 2011. Now if Prime Performance repeated their U.S. study today, in the wake of the turbulent year that left big banks marred, these numbers would be radically higher.

Of the 6% who switched checking accounts in the Accenture study, one in four encountered problems with the process. Nevertheless, a large majority felt switching was still worth it, and 75% said they were pleased they made the switch.

Among those who did not switch their checking account, 90% said they had no desire to change. The remaining 10% wanted to switch but did not do so, with half saying they thought the process would take too long.

“With nearly a quarter of those switching their current account still experiencing problems, the industry certainly needs to tackle the shortcomings in the system to create fluidity in the market,” Kirk said. “There is a clear problem that customers perceive the switching process to be overly cumbersome, which does not necessarily match reality, and this needs to be addressed.”

This article © 2012 by The Financial Brand and may not be reproduced.

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This article © 2012 by The Financial Brand and may not be reproduced.

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Inadequate budgets.

According to The Financial Brand’s 2012 Bank & Credit Union Marketing Survey, bank and credit union executives say their organization’s lack of marketing investment is what holds them back, this despite the fact that nearly half saw their budgets increase in 2012. They also feel that their I.T. systems are limiting, that it’s difficult to get employee support for marketing initiatives, and (of course) there’s always a boatload of compliance headaches.

If financial marketers seem cranky, maybe they have good reason to be. The turbulence of 2011 strained both banks and credit unions alike, and it doesn’t look like 2012 is shaping up to be much easier. Indeed, marketing executives at banks and credit unions have their work cut out for them this year. They say their number one priority is to increase their financial institution’s lending portfolio. How? By cross-selling mortgages, auto loans and credit cards to existing customers. But the lending market — everything about the entire economy — isn’t cooperating. There aren’t many consumers brave enough to apply for credit in this rotten economy, and only a handful meet lenders’ new, stricter requirements.

The 2012 Bank & Credit Union Marketing Survey also revealed that financial marketers plan to emphasize their e-strategies more in 2012, with a specific focus on social media, PFM and online advertising. Meanwhile, the more traditional aspects of bank marketing — TV/radio spots, physical branches and even print ads — continue to hold steady ground.

You can review the full results of The Financial Brand’s study in detail below. There is also a companion piece to this article,“What’s The Single Biggest Financial Marketing Issue In 2012?“ highlighting answers to the survey’s only open-ended question.

Special thanks go out to all those who participated in the survey. These folks appreciate the value of collective insight — that you can learn a lot by contributing a little. The Financial Brand also extends a big thank you Jim Marous, Senior Marketing Director with Harland Clarke and publisher of Bank Marketing Strategy, for his logistical and marketing support that contributed so much to the success of this survey. You can read Jim’s take on the survey here at his blog. Thanks go out to the good people at ACTON Marketing as well, who helped recruit survey participants.

Breakdown of Participants

The survey was completed by 228 total participants, including 84 banks, 30 community banks and 104 credit unions. 82% of respondents worked in a marketing capacity. Financial institutions in all asset classes were well-represented — 15 responses came from those with over $100 billion in assets, while 57 responses came from those with less than $100 million in assets.

Biggest Marketing Challenges in 2012

What do financial marketers feel is holding them back? Topping the list in 2012, half blame insufficient budgets and manpower. It is perhaps a bit ironic that financial marketers feel they are (#1) inadequately funded and understaffed considering that they struggle with measuring and proving the impact of their efforts (#2 on the list).

Many of the challenges facing financial marketing executives involve other departments, particularly  I.T., sales/operations and HR. In order for bank and credit union marketers to succeed, they need forge closer ties with these departments in 2012 and beyond. An isolated marketing department can only achieve so much.

It is simply stunning that only 9% of financial marketers see consumers’ lack of trust in the banking industry as a significant marketing challenge in 2012. (Try telling that to BofA.)

Reality Check: For consumers, their economic meltdown is far from over and banks are still to blame.

Changes to Marketing Budget in 2012

When asked how their financial institution’s marketing budget will change in 2012, 45% said it would increase, 12% anticipated a decrease, while 39% said it would stay about the same. The Financial Brand has frequently noted that marketing budgets at banks and credit unions should equate to approximately 0.1% of assets — a $1 billion financial institution should have a marketing budget around $1 million.

Top 3 Marketing Priorities

For this question, respondents were asked to rank their top three marketing priorities over the next 12-24 months. The data in the table signifies the number of respondents who ranked that priority either a #1, #2 or #3 on their list. The majority of financial institutions see cross-selling and loan growth as critical to their success in 2012.

If banks and credit unions want to deepen relationships, you’d think they see value in retaining those relationship, but they paradoxically put “customer/member retention” at the bottom of their priorities.

Reality Check: It may be easier to sell to an existing customer than to find a new one, but you can’t cross-sell customers/members (#1 in the list) that you don’t retain (#10).

Most Important Products & Services

In the survey, this question presented respondents with a randomized list of financial products and services, asking them to check those that their bank/credit union will concentrate on promoting most heavily in the next 12-24 months. Not surprisingly, lending products such as home loans, auto loans and credit cards top the list.

Most Important Marketing Channels

Despite many predictions declaring that traditional media is dead, roughly half of all bank and credit union marketers assert that print, TV, radio and outdoor advertising will have about the same importance in 2012 as it did last year. However, financial marketers also say that online advertising, social media and PFM tools will be growing in importance over the next 12 months. This data suggests that future of bank and credit union marketing will shift to the internet, but old habits die hard. It’s also worth noting the increase in significance of data-driven initiatives such as onboarding, database/matrix marketing, CRM systems and direct mail.

Utilization of Marketing Vendors & Suppliers

Roughly two-thirds of banks and credit unions utilize the services of an outside ad agency or design firm. A similar number turn to web developers for their online needs, while nearly 3-in-4 use a production company for their TV and radio spots. Only about a quarter of financial institutions utilize a third-party vendor to help them in areas like public relations, social media and financial education.

Primary Tools Used to Measure Branding and Marketing

Anyone who works in management — especially those in marketing — knows how hard it can be to correlate advertising and branding with results. When you look at the tools financial marketers are using in 2012 to assess and measure the success of their efforts, you see the usual suspects, mostly metrics that gauge the overall health and performance of a financial institution. But what’s startling is the number of bank and credit union marketers that don’t look at these things. Nearly a third (28%) don’t view marketing activities through the lens of customer acquisition. One in three don’t incorporate customer feedback. Three in five don’t factor attrition/churn rates.

Changes in Size of Branch Network

Pundits have been predicting the demise of branches since the mid 90s, but (for now) banks and credit unions seem reluctant to accept this. Rather than close branches, 42% say they are planning to open more locations in 2012, while nearly half say the size of their branch network will not shrink and at least stay the same. Only 6% of financial institutions say they intend to close any branches in 2012.

Utilization of Online Marketing Tools

When The Financial Brand conducted a similar study back in 2010, only 69% of banks and credit unions said they utilized email, but that number increased 10% in 2012. Similarly, 68% say they now pay for online banner ads vs. only 54% who said they did so in 2010 — an increase of 14 percentage points. Those pursuing an SEO strategy grew by 13 percentage points. But it was ads in eStatements that saw the most growth, moving from 44% in 2010 to 63% in 2012 (up 19 points). Fewer financial institutions say they are using microsites in 2012 (52% vs. 38%), signalling a significant slowdown in this once-popular internet marketing approach.

Utilization of Social Media Tools

Two in five financial institutions either have a blog today or plan to soon. Three in four use Facebook, making it the dominant social channel for banks and credit unions. Just about half are using the other three major social platforms: Twitter (54%), YouTube (49%) and Linkedn (48%).

In an August 2010 study, only 46% of financial institutions were using Facebook. 35% were using Twitter, and 25% were using YouTube. In both the 2010 and 2012 surveys, the same number of banks and credit unions said they had a blog (18%). Financial institutions utilizing an online discussion forum dropped by a quarter, down to 6%.

Staff Time Spent on Social Media

When asked how many staff hours are applied to social media every week, a staggering 40% of banks and credit unions say only 1-5 hours. And financial institutions wonder why they don’t get more out of it? There is practically nothing in marketing worth doing that only takes 1-5 hours per week — and that’s especially true with social media. You’re going to get out of it what you put into it. Little investment = little/no return.

When Was the Last Major Website Redesign?

The Financial Brand looks at hundreds upon hundreds of bank and credit union websites. Based on what we see, it’s hard to believe that nearly one in three financial institutions have undertaken a major redesign in the last year, or that two-thirds of banking websites have been refreshed within the last 2-3 years. There are still many websites in the financial industry that look dated (e.g., more than five years old).

Do You Have Formal Brand Guidelines?

When asked if their financial institution currently has a formal, written set of brand guidelines, 53% said yes, although it’s likely that many of these respondents have only a set of graphic design standards rather than a broader brand manual applicable to all employees. One in five financial institutions don’t have brand guidelines of any kind, but an equal number intend to.

This article © 2012 by The Financial Brand and may not be reproduced.

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Those were the critical questions driving a study published by the CMO Council entitled “Delivering Positive Impressions During Market Depressions.” The study was based on research fielded in August and September 2011, encompassing some 120 financial marketers — primarily CMOs and Marketing VPs with spanning all asset classes — local to global. Credit unions were not included in the survey.

Whether consumers really are panicked or not, bankers certainly believe their customers are worried, with 89% rating customers’ level of anxiety as moderate to very high. This belief has impacted bank marcom strategies significantly. 34% have seen cutbacks in marketing programs and budgets as a result.

Bank marketers said the current state of the financial industry has made it increasingly difficult to communicate with consumers and restore confidence. 43% of respondents said people trust banks less and are now more skeptical. 87% blamed this negative consumer sentiment for producing a moderately- to extremely challenging environment for bank marketing communications. And yet only 39% of bank marketers feel their customers’ elevated concerns warrants increased levels of contact and communications.

When asked which channels the bank receives the most requests from customers for reassurance, the top three most frequent responses were all in-person channels: 54% said account managers, 52% said call centers and 48% said branch visits. Only 29% cited their website and 22% said email. Social media was nowhere on the radar.

The CMO Council’s full report, “Delivering Positive Impressions During Market Depressions,” was published in conjunction with True North Custom Media, a provider of marketing, strategy, and analytic solutions to financial institutions.

You can download the complete 27-page study for free after submitting a few details here. Among the six qualitative interviews published as part of the study are insights from marketing executives at First Tennessee, Middleburg, MidSouth and Union banks.

This article © 2012 by The Financial Brand and may not be reproduced.

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Among the largest U.S. institutions (assets $30B+), Wells Fargo reclaims the number one position for the first time since 2008, followed by U.S. Bank, M&T, Fifth Third and PNC. M&T and PNC ranked in the top five in previous years, but Fifth Third enters the top five for the first time in 2011.

Two institutions that previously ranked high on the list, Northern Trust and JPMorgan Chase, dropped out of the 2011 rankings, as their equity levels fell below Bancography’s minimum level for inclusion.

The BBVI rankings analyze US banks, thrifts and credit unions according to the profit premium their brands add to each institution’s underlying tangible value. This is the fourth consecutive year the BBVI study has been published by Bancography, a financial services consulting firm based in Birmingham, Alabama.

In calculating brand value, Bancography quantifies the proportion of each institution’s long-term value that is attributable to the intangible factors that constitute an institution’s brand — reputation, service quality, image and market awareness. The brand value index identifies institutions that produce financial results beyond what their capital base, market conditions and competitive environments would predict. The calculations reward institutions that display consistently strong earnings and a reasonable cost of funds.

Buoyed by a strong economy, the state of Texas leads all others throughout the study, with 12 Texas banks and nine credit unions ranked. Texas, the Midwest and the West place strongly in the rankings, with banks from those regions occupying 30 out of 40 positions. In contrast, the South and Mid-Atlantic regions are only minimally represented in the rankings, suggesting the troubled economy continues to affect brand strength. Institutions in those regions have suffered significant financial losses and greatly diminished balance growth rates.

Reflecting the strength and stability of the credit union sector, 19 of 2010’s top 25 large institutions retain their top-25 status in 2011. For the second year in a row Austin Telco FCU leads the largest credit unions (assets > $1 billion), followed by Landmark Credit Union and Local Government FCU.

The change — or lack thereof — in credit union rankings versus 2010 differs sharply from the commercial bank rankings, which saw widespread change from the prior year.

The tables below display the top ranking bank and credit union brands for 2011, with distinctions made between banks and credit unions of varying asset tiers. 2010 rankings are posted for comparison.

Institutions with negative average income over the past three years, or with insufficient equity, are  not included in the rankings.

Megabanks ($30+ billion assets)

* Moved up from $2B-$30B asset tier

Large Banks ($2 billion – $20 billion assets)

** Did not exist before 2010 (result of 10 merged banks)
* Moved up from $500M-$2B asset tier
n/a = Did not meet equity to asset ratio requirement

Medium-Sized Banks ($500 million – $2 billion assets)

* Moved up from < $500M asset tier
n/a = did not meet equity to asset ratio requirement

Small Banks ($500+ million assets)

Large Credit Unions ($1+ billion assets)

* Moved up from < $1 billion asset tier

Smaller Credit Unions (less than $1 billion assets)

This article © 2012 by The Financial Brand and may not be reproduced.

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The conclusions come from a Prime Performance survey of over 8,000 consumers who had recently been assisted by a representative at a credit union, small bank, large bank or one of three mega-banks: BofA, Chase and Wells Fargo.

Collectively as an industry, the average net satisfaction score across all retail financial institutions increased 5% in 2010. Large banks, and specifically Chase, increased at a faster rate than average — 6% and 12% respsectively. Falling behind the average pace was BofA at 3% and Wells Fargo at 2%.

Small banks have pulled even with credit unions among Gen Y and Gen X customers, while credit unions have increased satisfaction among older members.

“While credit unions and community banks enjoy high satisfaction and customer loyalty, their larger competitors are closing the gap, especially younger customers,” said Jim Miller, President/Prime Performance and author of the report. “If small banks and credit unions don’t live up to customer expectations and provide a more personalized service they run the risk of losing their service advantage.”

The 2011 Bank and Credit Union Satisfaction Survey was conducted in August and September 2011, just a few weeks ahead of BofA’s $5 debit fee bombshell. It would be extremely interesting to see how the results would be affected if the study could be repeated now, after the mass exodus labeled Bank Transfer Day.

While the study did show satisfaction was on the rise, the survey also revealed that some banks — particularly the mega-banks– struggle to win the trust and loyalty of their customers. Many consumers believe big banks put institutional interests ahead of customers, have concerns about fees, and are not willing to refer friends and family to them. And things have only gotten harder for banks since October.

Other interesting survey findings included:

• Customers believe credit unions have the most competitive fees and BofA the least competitive.
• Customers at small banks and credit unions are more apt to believe employees enjoy their jobs than customers at big banks and mega-banks.
• Bank of America customers are the youngest, with an average age of 41.2 years (excluding minors). Small banks serve the oldest customer base, with an average age of 47.1 years.

As you look through the data, some of the results may surprise you. If the scores seem really high, remember that people are reflecting on real, personal experiences. Consumers will psychologically separate feelings about banks in general from the interactions they have with their bank. Ask consumers to rate banks in the abstract, and scores plunge. But drill down to specific situations and consumers tend to lighten up: “Yeah, I really hate banks… but that service representative Suzie was really nice and helpful.”

As Filene Research puts it, “It’s like voters who hate Congress but love their hometown Representative.”

You can download the complete study for free by clicking here and filling out a very simple registration form. The report includes a number of statistical breakdowns by age group: Gen-Y, Gen-X and Boomers. If you’re looking for comparisons of cross-generational demographic data, this report is definitely worth a look.

Overall Satisfaction With Service Experience

Likelihood to Switch

Likely to Recommend

Offers Competitive Fees

Problems/Complaints With the Bank in the Last Year

This article © 2012 by The Financial Brand and may not be reproduced.

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Those are among the findings of Intuit Financial Services Fourth Annual Financial Management Survey, a study fielded in October 2011 involving 1,000 participants across the United States.

Mobile Growth

Two out of every five participants in the study said they own a smartphone, but only one in five said they use it to check balances, transactions, make payments, etc. 17% said they plan to try it in 2012.

Gen-Y is a different story. They live — and bank — on mobile devices. 70% of Gen-Y respondents said they own a smartphone, and half use it for banking compared to only 23% of the general population. The research revealed that 18-32 year olds are three times more likely to adopt mobile banking than Gen-X, baby boomers and seniors.

More than half of Gen-Y uses more than one device per week to access their online banking information, while nearly everyone else sticks with just one. Another Intuit study encompassing more than 50,000 mobile banking customers showed that people tend to interact, on average, 45% more often with their financial institutions when using online and mobile solutions in combination, as opposed to online alone. Customers that used both online and mobile solutions also tended to hold, on average, 9% more deposit and loan accounts than people who didn’t use digital solutions at all.

When banking on mobile devices, 65% access account information through the web/internet, whereas 28% use a mobile application.

Mobile banking is growing in importance. 19% would switch if their financial institution stopped offering mobile banking, but again that number jumps to 30% when just looking at Gen-Y.

Among those who don’t use mobile banking services, the most common reason — besides not owning a smartphone — is that some (22%) simply prefer to bank online from their desktop workstation or laptop.

Channel Preferences

The percentage of consumers using online banking services continues to increase — climbing 11 percentage points since 2009, up to 38% in 2011. However, a large number of consumers (45%) still manage their finances manually, without using online tools.

27% of banking consumers visit their financial institutions’ branches once a month. 76% of respondents in the study said online banking tools were the main reason they no longer needed to visit branches as often as they used to.

Kinda, Sorta Loyal…

Half of all respondents said there primary bank was a major national/global institution, with the balance of relationships distributed among regional- or community banks or credit unions.

45% of financial consumers have stuck with their bank or credit union for more than 10 years. However, 36% said they have already switched or plan to switch banking providers. 33% said that they would (ostensibly) switch for better online banking tools.

Of those that have switched financial institutions in the last three years, 30% of respondents claimed they made the change for better rates. 25% felt that their former banking provider was not in touch with their needs. 20% wanted to bank at a smaller institution.

“Banking on customer inertia is not a viable growth strategy,” said CeCe Morken, president and general manager of Intuit Financial Services.

This article © 2012 by The Financial Brand and may not be reproduced.

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The study paints a bleak picture for banks, particularly BofA. Nearly one in ten BofA customers said they were not at all satisfied, and nearly the same number are not at all likely to continue using the bank. 15% rated BofA’s service “poor.”

On the sunnier side, people like their credit unions. Credit union members are twice as likely to be very- or extremely satisfied than bank customers. And almost nine out of 10 members say they are very- or extremely likely to continue using their credit union, about double that of bank customers. Credit union members are three times as likely as BofA’s customers to experience a trustworthy relationship and feel valued as a customer.

Fortunately for big banks, Harris Interactive says everyone won’t follow through on their threats to leave. The study showed that while only one-quarter to one-third of big bank customers are experiencing a positive overall relationship, almost half say they are likely to continue using the same institutions.

“Let’s face it, it’s a time-consuming and complex task to evaluate alternatives and switch your primary bank,” points out Carol Gstalder, EVP/Market and Customer Insights at Harris Interactive. Still, that doesn’t mean banks have nothing to worry about.

“Big banks will need to make real changes to earn back the trust of their customers,” according to Gstalder. “Even more, they’ll need to do it quickly before a regional competitor, community bank, or credit union figures out how to make it simple for customers to switch to partners who provide an exceptional customer experience.”

Likelihood to Continue to Use

Overall Satisfaction

Trustworthy Relationship

Value Me as a Customer

This article © 2012 by The Financial Brand and may not be reproduced.

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In a study from Javelin Strategy & Research, “2011 Online Account Opening,” the firm says that faulty online account opening processes hobble financial institutions in their battle for customers and profitability.

“First impressions are everything,” said James Van Dyke, President of Javelin. “Financial institutions risk their reputations and relationships with customers when the online application process goes awry.”

Two-thirds of those who tried to become a new customer were unable to complete their applications online.

“Successful online account opening is key for all financial institutions, especially for smaller community banks that tend to draw a higher percentage of newcomers, yet suffer higher failure and abandonment rates,” Van Dyke added.

According to Javelin, one in four consumers tried to open an account online last year, with applications ranging for everything from checking and credit cards to auto loans and mortgages. In 2011, 5.8 million people attempted — and failed — to open accounts online.

Only 53% of applicants were able to successfully open and fund their account online. The other half abandoned the process, were forced into a branch, couldn’t open the type of account they wanted, or faced other issues.

Most people apply for accounts online because they expect it to be faster and more convenient than doing it over the phone or visiting a branch. But once a customer encounters a roadblock, they either shift their application to other more costly channels, take their business elsewhere, or just give up entirely.

“A consumer’s chance of successfully opening and funding an online account is a virtual coin toss,” notes Mark Schwanhausser, a Senior Analyst at Javelin. “Consumers that experience problems will go elsewhere, and financial institutions will miss out on revenue and cost-savings opportunities.”

Javelin conservatively estimates the cost to retail banks and credit unions to total at least $873 million in lost revenue, perhaps much more.

For the report, Javelin used a team of “secret shoppers” to try out the online application process for various types of accounts at the 10 largest US financial institutions, plus five technologically-oriented smaller banks and credit unions. The study also integrates data collected from more than 5,000 consumers.

Most of the problems with online account openings are related to how the process is structured, not necessarily technological breakdowns. For instance, one of the issues Javelin unearthed while assessing Citibank’s online home equity application included a cycle of frustrating links that forced the user to call a bank representative on the phone for help.

“I was a bit disappointed because I expected it to be an instant gratification process, similar to online shopping,” complained one frustrated customer who only identified himself as Bob. “Instead, it can take a couple of weeks and involves snail mail.”

“if they are going to ask you to snail-mail them a copy of your ID, they could say that upfront instead of keeping you in the dark for days until you get a letter in the mail,” Bob added.

“The online applications seemed to disappear into a black hole, with the only acknowledgement being ‘We’ll let you know when your application has been approved’.”

Javelin’s Van Dyke says the online account opening process leaves a lot to be desired. “Despite online account opening having existed for quite some time, there’s still tremendous room for improving what is effectively the welcome mat or barred-door to the online branch,” Van Dyke noted.

“There’s a host of reasons why online account opening succeeds or fails with a particular institution’s customers, and for anyone who’s serious about improving the process I’d recommend starting with who consumers rate as being best or worst, and then benchmarking your own requirements (or current product) against what your top competitors offer.”

You can download a brochure about Javelin’s study and purchase the “2011 Online Account Opening” report here.

This article © 2012 by The Financial Brand and may not be reproduced.

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“Free checking is going away because the economic model that free checking survived on is no longer viable,” says Ajay Nagarkatte, managing director of BAI Research.

Even so, Greg McBride, CFA, senior financial analyst for Bankrate, says free checking isn’t likely to go away entirely for those consumers willing to jump through a few hoops.

Last year, 88% of noninterest accounts were either free or could become free if the customer signed up for direct deposit. This year, the number is 92%, which shows banks are still willing to offer free checking in exchange for a deeper relationship with customers.

The average account maintenance fee rose from $2.49 last year to $4.37 this year — that’s $52.44 annually — an increase of 85%.

The average minimum balance required to avoid monthly fees rose from $249 in 2010 to $585 this year, an increase of nearly 135%.

“The big increases in balance requirements and fees aren’t just from banks that already have those raising them, it’s also from those that didn’t use to have a balance requirement or a fee now instituting one,” McBride says.

At this point, only 4% of accounts charge a point-of-sale fee when using a debit card, and less than 2% charge a monthly or annual fee for carrying a debit card.

ATM surcharges hit an all-time high for the seventh consecutive year. in 2010, the average charge was $2.33, climbing to $2.40 in 2011. That’s an increase of 7¢, or about 3%. The most common ATM fee was $3.

“A few years ago, Bank of America moved to the $3 surcharge, which at the time was uncharted territory. Now, it’s the most common surcharge that we find in the survey,” McBride says. “There was a lot of negative reaction at the time, but it didn’t take long before the industry embraced it.”

The fee a bank charges its own customers for drawing money out of another bank’s ATM stayed flat at $1.41. That brings the average total customers have to pay for using an out-of-network ATM up to $3.81. If a customer only withdraws $20 from an ATM, they are paying a fee that equates to a 19% surcharge.

The average overdraft/NSF fee rose 1%, from $30.47 last year to a record $30.83 this year. Bankrate says these fees typically rise at or near the rate of inflation.

Interest checking continues to become less attractive for accountholders. Yields were down for the fifth consecutive year, falling 2 basis points to an all-time low of 0.08%. Even as yields fell, fees rose. The average monthly maintenance fee for an interest-bearing checking account jumped 8.5%, from $13.05 to $14.05. Meanwhile, the minimum balance on these accounts increased sharply, rising 43% from $3,883 to $5,587.

Bankrate’s data come from surveying the five largest banks and five largest thrifts in 25 of the nation’s biggest markets from August 1-12, 2011. Bankrate asked institutions about terms on one generic noninterest account and one interest-bearing account for the general consumer.

This article © 2012 by The Financial Brand and may not be reproduced.

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What does the typical bank on Twitter look like? They have around 250 followers, and pump out a tweet about every week or so.

Aggregating the data reveals that fewer than one million people are following retail banks on Twitter, and banks only follow one quarter of those people back. Subtract the quarter million people following AmEx and and banks are only reaching a collective audience of 467,410 people. That barely equates to 0.15% of the entire US population. BofA alone has a customer base 110x that size. Subtract 16,500 followers from the 65 banks (16.3%) that haven’t tweeted in over one year. And many of a bank’s followers are industry peers — consultants, vendors, the trade media and other banks. Keep in mind, financial institutions have been on Twitter since at least 2008; we’re well into the banking industry’s third year on the social platform now.

Here’s the rest of the stats for the 400 retail banks on Twitter and how they all break down.

Followers

• Banks with less than 200 followers: 188 (47%)
• Banks with more than 1,000 followers: 40 (19.8%)
• Banks with more than 5,000 followers: 27 (6.8%)
• Number of people following banks on Twitter: 713,744
  (246,334 or 35% of which are attributed to AmEx, arguably not a retail bank)
• Average number of followers per bank: 1,784
• Mean number of followers: 222

Following

• Banks following no one: 43 (10.8%)
• Banks following 10 people or less: 102 (25.5%)
• Banks following fewer than 200 people: 275 (68.8%)
• Banks following 1,000 people or more: 40 (10%)
• Mean number of people followed: 64

Tweets

• Banks with 10 tweets or less: 53 (13.3%)
• Banks sending over 1,000 tweets total: 58 (14.5%)
• Total tweets sent by 400 English-speaking banks: 363,344
• Average number of tweets sent per bank: 908
• Mean number of tweets sent: 195

Frequency

• Banks who tweeted in the last 2 hours: 78 (19.5%)
• Banks who tweeted in the last 24 hours: 166 (41.5%)
• Banks who tweeted in the last week: 238 (59.5%)
• Banks who haven’t tweeted in a month or more: 121 (30.3%)
• Banks who haven’t tweeted in over a year: 65 (16.3%)
• Banks who have never sent a tweet: 15 (3.8%)

This article © 2012 by The Financial Brand and may not be reproduced.

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This article © 2012 by The Financial Brand and may not be reproduced.

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Comparing the results of its survey of 2,500 current account customers in the UK and Ireland completed late last year with those of a similar survey conducted in 2007, Accenture found that:

• The number of British high street bank customers likely to purchase their next financial product from their current provider declined from 66% to 46%.
• Those who had actually purchased new products from their bank within a 12-month period fell from 29% to 22%.
• The number of British customers saying they were satisfied with their high street bank declined from 84% to 73%.
• Those who would recommend their financial provider to family and friends fell from 64% to 58%, a 6-point drop.
• Customers who complained to high street banks increased from 14% to 17%, and one bank received complaints from nearly one-in-three customers over a 12-month period.

“These results provide further evidence that even several years since the financial crisis hit, the relationship between banks and their customers continues to decline,” said Peter Kirk, senior executive in Accenture’s Financial Services practice, and author of the research. “It appears that this is now influencing consumer behavior, with only a bare majority of high street customers likely to recommend their provider and customer defections continuing apace.”

According to the research, switching rates among British high street bank customers have remained significant. In the latest survey, 16% of respondents said they had recently switched one or more products from their existing bank vs. 14% in 2007. Another 14% said they planned to do so within the next 12 months.

“Banks must stop and listen to their customers or they risk losing them to new entrants and other competitors,” Kirk said. “But our latest survey found that one in five customer complaints were poorly handled by the banks. Each of those instances represents a lost opportunity to repair a strained relationship.”

Low Loyalty Among Gen-Y

Accenture’s most recent survey suggests that banks throughout the UK and Ireland face significant pressures in developing relationships with their newest generation of customers. Respondents aged 18 to 24 were 50% more likely than others to move to another bank — with nearly one in five saying they planned to switch one or more products from their current bank within the next year, compared to only 12% of older respondents who said they planned to make a switch.

But the survey also found that the youngest group of customers was about 30% less likely to complain to their banks than others, with only 13% saying they had registered a grievance with their bank vs. 18% of older respondents. Apparently they don’t think moaning makes much of a difference, so they simply move their money instead.

Customers aged 18-24 also placed more significance on value for money compared to their more mature counterparts who favored the promise of speedy and efficient service, according to the survey.

“With an emerging youth segment that is more likely to simply switch banks when they encounter a problem, rather than take time to complain about service, institutions must carefully analyze this group and adapt products, services and channels to interact with them on their terms,” Kirk said. “All the while, they must keep their more mature, loyal and communicative customers on their side.”

Self-Service Predominates But Branches Far from Dead

The survey found that more than two-thirds of survey respondents (69%) use internet banking on a daily or weekly basis. This compares with 19% who use branches, 7% who use mobile channels and 6% who use call centers with the same frequency.

“Three quarters of customers say they rarely if ever bank by telephone today,” Kirk noted. “As traditional call centers become a channel for handling only complex banking matters, banks will have to take proper advantage of this shift — just as they must adapt to the broader revolution in bank channels taking place.”

“To help rebuild customer trust and loyalty, reduce churn and improve retention, banks must enhance their online and mobile services, better integrate channels that their customers use most — like branches and websites — and focus on handling complaints properly the first time.”

This article © 2012 by The Financial Brand and may not be reproduced.

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The study found that the average salary was $65,000, a figure that directly correlated to the size of the credit union, industry experience, job title and other factors. The median was $58,500.

VPs had a median salary of $90,500, and worked about 50 hours per week. Managers and Directors had a median salary of $55,000 working 45 hours per week. Business Development personnel had a similar salary, working 45 hours for $50,000. Specialists had a median salary of $41,000, and worked 40 hour weeks.

Salaries have not kept pace with inflation either. MAC’s 2006 salary survey indicated real average salaries that were about 10% higher than in 2010.

Of those earning the most in the credit union marketing field, nearly half (47%) had a Master’s degree.

The average age for respondents was 38.4. By comparison, the US average is 44.7. Those in the 45 to 54 age group were more likely to work 50+ hours per week, while younger employees were more likely to work fewer hours (<40 hours per week). The study found that those who were paid more worked longer hours (50+ per week) vs. those who preferred the standard work load.

Bigger Isn’t Better

The data showed that there are relatively few happy credit union marketers in the nation’s larger credit unions. Work weeks that average over 40 hours might explain part of this ambivalence. Another explanation could be that, on average, men earn more than women, despite the fact that women outnumber men 3-to-1 in credit union marketing positions. An astonishing 86% of those in the lowest income quintile were women.

The study used the Net Promoter framework to gauge job satisfaction levels among credit union marketers. Those that ranked 0 through 6 were considered “detractors.” Those ranking 7 or 8 were considered “neutral.” And the 9 and 10 people were considered “promoters.” The net score is derived by subtracting the 0 through 6’s from the 9 and 10’s.

13% ranked their credit union a 10, and 17% scored a 9. On the other end of the spectrum, 16% were in the 0 to 6 range. The remaining 54% fell into the neutral category.

Among the survey’s respondents, there was a positive correlation between asset size and years of credit union industry experience. Those at smaller credit unions were much more likely to have shorter tenure in the industry, while those at larger credit unions were much more likely to have long tenures. The average length of time spent in the industry was 8.8 years, with the typical employee spending six of those years with their current credit union.

Not even one quarter of the survey’s participants said there was “a strong likelihood” that they would stay in the credit union industry. Those with mid-term tenures were the ones most likely to have the lowest likelihood. Give them a better opportunity and most of them could be out the industry door.

The Great Recession pushed marketing expenditures down about 13% in 2009 and they rose only 4% in 2010. After growing for most of the decade, credit union employment in the US dropped in 2009 and 2010.

The “2011 Salary Survey” included 23 questions posed to 225 credit union marketers between January and March, 2011.

The average credit union asset size was $417 million, with an average of around 42,500 members.

You can download the complete report here, or view it on page two of this article here at The Financial Brand.


This article © 2012 by The Financial Brand and may not be reproduced.

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