ANN ARBOR, Mich.-It may be that the flood of new members to credit unions in 2012 is coming at a price.
Consumer satisfaction with credit unions has declined in the latest American Customer Satisfaction Index (ASCI), with member satisfaction declining 5.7 percentage points to 82 (on a 1-100 scale). Credit unions have seen 2.1 million new members this year, including 740,000 during the third quarter, according to NCUA.
Nevertheless, credit unions remain best-in-class for financial services and set the bar for customer satisfaction among all service industries covered by the ACSI, the company said in its analysis.
"The large influx of new customers for credit unions, many of whom left banks because of rising fees, poses new challenges for customer service," said Claes Fornell, ACSI founder in a released statement. "The question becomes, How to best serve a fast-growing customer franchise? The more customers you have, the more difficult it gets."
Satisfaction With Banks Rises
Meanwhile, customer satisfaction with banks regarding checking, savings and loan services grew by 2.7% to 77, mostly due to strong and steady client satisfaction for smaller banks, along with a big upswing for the nation's largest bank, JPMorgan Chase, ASCI said. Small banks-stable at an ACSI score of 79-continue to outclass large banks and capture market share because of it.
"As more customers move from large banks to smaller banks and credit unions, the overall customer satisfaction level for banks goes up as a matter of mathematics," says Fornell. "As the smaller banks do a better job with customers and therefore attract more of them, customer satisfaction for banks on the whole gets a boost."
JPMorgan Chase leads among big banks. With a 6% rise to an ACSI score of 74, the bank matches its prerecession result from 2007. Other big banks have to deal with deteriorating customer satisfaction. Wells Fargo slides 3% to 71 and Citigroup retreats 4% to 70. BofA declined 3% to 66, reaching its lowest level of customer satisfaction in over a decade.
"The total fees from overdraft charges alone in 2011, most of them from big banks, amounted to more than $30 billion," says Fornell. "Customers increasingly are rejecting the ever-mounting fees charged by large banks and taking their business to credit unions instead. Bank of America, in particular, stands out as the only bank that is still below its prerecession customer satisfaction level. It is clear that this is mostly because of fees. Customer satisfaction was probably set to deteriorate further as additional fees were in the making until a few weeks ago, when BofA backed away from the idea."