Fees, Service Issues Lead to Increase in Bank Switching, Report Says

Fees, Service Issues Lead to Increase in Bank Switching, Report Says

February 27, 2012

According to a news release issued Monday, a study by J.D. Power and Associates finds that Consumer backlash against bank fees, coupled with poor service and unmet customer expectations, has fueled increases in defection rates among customers of large, regional and midsize bank.

According to the news release:

The study, which examines the bank shopping and selection process, finds that 9.6 percent of customers in 2012 indicate they switched their primary banking institution during the past year to a new provider. This is up from 8.7 percent in 2011 and 7.7 percent in 2010.

“When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet,” said Michael Beird, director of the banking services practice at J.D. Power and Associates.

However, according to Beird, customers weigh the price they pay against the value of their experience.

“It is apparent that new or increased fees are the proverbial straws that break the camel’s back,” said Beird. “Service experiences that fall below customer expectations are a powerful influencer that primes customers for switching once a subsequent event gives them a final reason to defect. Regardless of bank size, more than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service.”

Read the entire J.D. Power and Associated news release HERE.

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