Community financial institutions could be poised to gain market share from big banks this year, but they’ll have to ramp up their investments in marketing and branding first.
58% of consumers don’t believe their primary bank has their best interests at heart, and 42% feel their bank takes advantage of them with all the fees, according to The Consumer Banking Insights Study. Furthermore, 43% of megabank customers are not satisfied, and roughly half of all megabank customers (46%) say they don’t feel very loyal to their primary bank.
“In order to better compete with megabanks, community institutions will need to boost their marketing efforts and product lines.”
— Gabe Krajicek
Consumers may be dissatisfied with megabanks, but that alone is not enough to get them to switch institutions. Nearly 1 in 4 (23%) megabank customers say they’re at least somewhat likely to switch their checking account to a local community bank or credit union this year, while 63% say they have never considered opening a checking account at a local community financial institution.
One-quarter (24%) of megabank customers say they don’t use a community bank or credit union because they don’t believe smaller institutions can offer the same benefits. Additionally, 83% of megabank customers say a recognizable brand name — a major challenge for community institutions — is at least somewhat important to them when choosing a bank.
The study found an overwhelming majority of customers at community-based financial institutions (93%) say they trust their bank and feel very loyal (84%) toward their institution. One in two consumers said they believe that banking locally is important.
83% of megabank customers say a recognizable brand name is important when choosing a bank.
The study, conducted by Harris Poll on behalf of BancVue’s Kasasa, polled 1,020 U.S. adults ages 18 and up to gauge their banking and checking preferences, feelings and behaviors.
“This study found that many Americans are looking for roughly the same things from their financial institutions: a trustworthy, dependable relationship and few or no fees,” said Gabe Krajicek, BancVue’s CEO.
“In order to better compete with megabanks, community institutions will need to boost their marketing efforts and product lines,” Krajicek said.
“Branding influences so many of our decisions, including our banking choices,” Krajicek continued. “It’s important for community financial institutions to take a hard look at their branding and marketing strategies. If their efforts are falling short, there are solutions out there that they can — and should — take advantage of.”